DV (i.e. FireWire) is the way forward first of all (assuming your DV Cam has DV out). This makes life a whole lot simpler, allows control over the cam etc.
WMM is a very good introduction to bsic video editing, very user friendly, good wipes and titles - but I'm sure that you will very soon want to get more adventurous in your productions, and this is where WMM will let you down. So it's worth now thinking about alternative packages. The current favourites are Pinnacle Studio and Videowave - both are the good next level up from WMM.
The big advantage of NOT using WMM is that these other packages will record to MPEG-2 which is the native format of DVD's. By keeping the format as DV to MPEG you will maintain the least number of transitions between formats - meaning better quality pictures - plus it will be quicker to stick the content to a DVD disc, as you won't have to re-render the video into a new format.
It's also worth having a look at Avid. There will be two sets of people here - those that ask what Avid is and those that scream about the cost. Well for the first - Avid is a defcto stanard in pro video editing, but have recently released a 'low-cost' edit solution for today's faster PCs.
This low-cost is still over a grand - but I did read somewhere that they were worried about Adobe becoming the stanard kit that students learned their trade on, so were planning to release a FREE version - alibiet highly stripped down. Find it here
http://www.avid.com/freedv/ although I have to say I've not tried it (I have used the full Avid Edit suite at work however) - let me know how you get on.
Then the daddy of the edit - always Adobe Premier - and if you can afford it stick a copy of After Effects on too for some stunning (if not difficult) visual effects like blue screen stuff.
Enjoy!!!!