Agree firewire needed for miniDV tape transfer to PC which I capture as .avi file - one hour equals approx 10gig of hdd space.

Of course it looks not so good downgraded to mpeg1.

As already posted most any editing program will support and open your files so you can edit, add transitions or effects and titles and then render to whatever format best suited for your distribution copy scheme - mpeg2 for standard dvd production.
GoodLuck