*Note* I'm wholly ignorant in the world of digital editing.

Two months ago I purchased a Panasonic Palmcorder PV-DV402D. It came
with a windows based program called Movie Messenger 1.1. After several
days of tinkering, I realized the software isn't very robust. A 3 minute
video clip is 660 Mb!

I purchased a D-Link DFW-500 IEEE 1394 compliant card to transfer my
data from Palmcorder to PC.

What I'm looking for is:
Digital editing software that allows me to transfer from Palmcorder to
PC, edit live video, and take snap shots of video.
Encode in Divx or other formats.

Anyone have some advice?