Video Editing input and output

I have a video of the kids, a cam corder, and a digital cam corder.
I would like to edit some of the old videos and put them back to video.
Using the PC would seem to be the best way as that will not involve a loss of quality.
What is the best and cheapest hardware and software for doing this, and extra disk for the PC seems a must and I have windows ME. It seems that I should keep a copy on CD for later use but currently I have neither DVD reader or writer and only limited funds for purchase of any of these.