Editing video on a PC can be quite memory intensive, I would seriously consider getting more RAM.
Video files can also take up quite a lot of space, so depending on how long you want to keep them it may be an idea to get a larger hard drive. But if you get into the habit of editing what you record and putting it straight onto CD, you should be ok with your 12.5gb.
I quite like the look of the camcorders that record straight to discs instead of tapes, but can't offer any advice on which to choose i'm afraid. (FYI I have a Sony MicroMV camcorder and wouldn't buy another due to MMV compatability issues.)