What kind of videos are you planning on making? Is this a hobby for fun or a professional venture or career change?
A good camcorder is always a nice thing. I own the Panasonic GS200, and it's awesome! It makes beautiful video!
As for editing software, if you're just starting video editing, you might not wanna jump in with a $500 program. Premiere Pro is great... but maybe you should start with something like Premiere Elements or Pinnacle Studio Plus. Both are around $99 and will get your feet wet with video editing. Both make great quality video and can make menus and burn DVDs from one program.
Or, if you're gonna take the plunge on professional software, you need some good hardware to support it. Fast processor, a gig of ram, another big hard drive for video, etc. Plus you still need another program to author DVDs since Premiere is only an editor.
I've been using Pinnacle Studio for a couple years, and the quality is great. The DVDs it creates look just as good as the DV tape from the camera. Technology is so good and so cheap nowadays, it's really up to the cameraman and editor's skills to make good videos. You don't necessarily need to drop a couple grand on a new hobby.