Well, 40GB should be plenty, depending on how much of that is actually free.

I'm sorry, I didn't quite get how you were going to connect it via hardware. Is the "iLink connector" some sort of PC interface? On my dad's sony I seem to remember it just being something that could send the audio/video signals over IR to the TV.

Anyway, I've been uing Premiere, and it's a very powerful program, but not user-friendly IMO. Then again, I don't think any Adobe products are. So yeah, that's it. After that I think Nero has a VCD burning tool.