For just over £50 inc P&P, get Adobe Premiere Elements. It's been reviewed on this site. Clicky!

(cheapest price i found was here).

Not sure about surround sound, though some other people on here might be able to help you out with that question.

Difference between a DVD and VCD: DVDs bought from a shop hold 9.4GB* and CDs only hold 700MB. a video CD is just a normal CDROM with an MPEG video on it. VCDs are probably about the same quality as VHS.

* I think it's around that size. Although there are currently more single layer DVD writers in use which you can only fit 4.7GB on, Dual layer writers (8.5GB) are generally only a few pounds more, so it makes sense to get one of those instead.