There might be many factors which prevented your DVD from playing back. Finalizing could be one, age of the DVD drive/player could be another. It is hard to recommend a Camcorder without knowing what kind of finale use of the footage will be. If you just want to view the footage on a TV, any camcorder will work using the A/V (Audio Video) Cables. If you want to play back on DvD, a DvD based should work but you may want to look at compatibility with the player first. Hard drive and Flash Memory based camcorders are fast, reliable and easy to use. Conversion to DvD can be done either be transferring to computer and burned using software, captured by use of a USB device such as the Dazzle from Pinnacle, or burned to a stand alone DvD Recorder.

The amount of memory is important, but more so is the amount AND speed of the drives, although you may want to go ahead and expand your computer it to its max 2gig of memory. The requirements of each system and type of HD file is different. There are some capture cards that require at least 2 Sata Hard Drives at 10,000 rpm in a Raid setting to work with HD Video files. Some programs that need Vista Ultimate to operate. Some only work with DV Tape, some don't work with AVCHD files or only certain types of AVCHD files.
Other programs require very little, such as the VideoStudio 11 from Ulead that is good with Hard Drive and Flash based camcorders.
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Once you have edited your HD product it will need to be Burned to DvD. If it is left as a native AVCHD file it can be burned to a standard DvD played on a Blu-ray Player.

Almost all camcorders come with a set of A/V (Audio Video) Cables that allow you to connect the camcorder to the TV input jacks. Some of the HD (High Definition) Camcorders have HDMI out ports.
As for the external drive..I always recommend getting an external drive for video storage. 1) It keeps your system drive clean. 2) You can easily move your video files from computer to computer. 3) If something happens to you editing computer your video files are safely on a separate external drive. 4) Eventually you will need the extra space for all the files.

Canon - EF-S 10-22mm f/3.5-4.5 USM Ultrawide Zoom Lens will give you fantastic results. Go to BestBuy.com and read the customers reviews after searching for this lens. Available at most stores and on line.