This threads is helpful (it has a great link by the last poster *wink wink*)
http://www.fantasybaseballcafe.com/foru ... =camcorder
or you can cut to the chase and go here:
You don't want to use a CD, because all you'll get is a video CD (VCD I think) and they have pretty bad quality, and you can't fit a lot on it. Get yourself an internal DVD burner. If you have a desktop, install it there. If you use a laptop, get yourself an external housing with firewire/USB 2.0 (assuming your laptop has either firewire/USB 2.0 outputs. If not, you'll also need a USB 2.0 PCMCIA card bus). The drive itself shouldn't be more that $80, the housing another $50, and you should be able to get the PCMCIA for bout $20. These prices may be out of date. Then you can go to Cost-co and get hundreds of blank DVDs for something like $20ish.
good luck, and if you have any specific questions, feel free to PM me.
EDIT: Just realized you were asking about software too. You should be able to get the "home version" of Vegas, Pinnacle, and others for about $100. You can download trial versions, but I think some features are disabled.