On edit: Does your camcorder have Firewire (IEEE-1394) output? If not... Free DV won't work for you... it's software only and requires a Firewire interface on the camcorder and on the host computer. That Pinnacle product is just the ticket for people that need to capture analog video and edit it...
If you have Firewire on the camera/computer... read on...
Why not try using Avid Free DV? As the name implies... it really is free!
http://www.avid.com/freedv/ - download it here
Free DV is based on the high-end post production editors that Avid is famous for. Sure, Free DV doesn't have the capability to do 12+ real-time streams or HD, but for what you need to do... I think it'll work just fine.
Here's the press release for the Pinnacle takeover:
http://www.avid.com/company/releases/2005/050321_pinnacle.html
Tony's right, though. Editing video is a BIG time system resource hog, especially when doing real-time effects and rendering - here's the minimum specs for Free DV / Xpress DV:
"Windows XP OS, 933 MHz Pentium III or any Pentium 4 or any Pentium M processor, 1 GB system memory (1. 5 GB recommended). "
Using the DV codec means that the video/audio files will occupy 3. 6MB/sec. Yeah, that's 3. 6 megabytes per second (~13GB/hour).

As a comparison, that's a higher bitrate than your average DVD. Should we get into 1:1 uncompressed or HD video? The bitrates of those codecs would make you choke...
My opinion is biased, but I'd be glad to offer advice as needed.
Matt