80 GB is a good start. Be aware there are a few formats for dvd burners. You have to be sure your regular player will work with the format you pick.
The reason I say 80 GB is a start is the best you could hope to store would be like 7 DVD movies on it. Each dvd runs around 9 GB or so, sometimes more. A VCD, which will play on most dvd players, and will burn with a regular burner is around 650 MB. Quality is obviously different as well as play time.
If you are not concerned with keeping it on the computer after you are done, then you can get a smaller drive, but I wouldn't go much smaller than 40 GB.
I think dell was offering a free upgrade but it was a regular cd burner or a dvd player, not a dvd burner.
More memory is also important. 512 MB would be a good start as well. 256 the bare minimum.
Hooking up the cam corder is part of a video capture card you would have to buy seperatly.
This would let you hook up rca jacks to your computer to capture the video feed and convert it into different formats for your computer.