Recommending a camcorder can be difficult. Try looking through the following review page and see if it helps you narrow things down a bit.

http://www.camcorderinfo.com/content...elect-2005.htm

As far as software goes it all depends on how complex you want to get. If you just need simple editing you already have the software you need if you run XP in Windows Movie Maker. Failing that you could have a look at Premiere Elements 2 which is fairly cheap and gives great results.