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I set up one of my computers last year for video editing. Used mostly shareware or demo video-editing software like Pinnacle Expression, anything by Pinnacle is easy to use. A lot of the other video-editing stuff is a waste of time.
If you have a digital video camcorder (not analog), you should get a firewire card so you can upload directly to the hard drive for movie editing. The only hardware I used was the digi-camcorder, firewire card and CD burner. I made VCDs instead of DVDs. Some of the new DVD are rigged with built-in software anti-piracy protection. You can make decent quality home videos, burn them on CD and play them in Windows Media Player or QuickTime format. VCDs are called a 'poor mans DVD'. You're limited to about 1 hour or less with VCDs, but that's okay with me. Also I never had a need to a use high-end graphics card. I would recommend you stick with basic hardware unless you have money to burn. Most DVD drives (actually they are glorified CD-ROMs with specific movie software to play DVD movies), they will recognize VCDs, no problem. Not sure about standalone units.
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