Some will disagree, but I'd stick with 98 for dv work (less hassle). XP seems to conflict with some dv cams and doesn't support others.
You'll need another hd - put prog on 'c' and edit on 2nd hd. Firewire card and cable.
Video Factory is good prog click here
Any burner but liteon r good. U don't need dvd burner as vcd's (mpeg2) r good.