In the days of 8mm and 16mm movi film, when editing was very difficult, and recording time very short (about 6 minutes for Super 8, I recall), most people learned to "edit in the camera" by thinking out ahead of time what they wanted and keeping scenes short 3 - 5 seconds. These techniques still work well with video. But with video storage being minimum 30 minutes and up to many hours with hard disk cameras, many tend to use their camera like a fire hose, capturing absolutely everything to be seen, and without editing, boring the pants off anyone you may wish to show your video to.
While your friends will love to see a few minutes of your "Christmas 2008 baby on the lawn" video anything longer will quickly loose audience.
Addressing your questions, for standard definition (SD) miniDV is by far the best quality (all other things being equal) as it is played out the camera, and if you have the disipline to apply those "edit in the camera"  techniques, you can play back, of the tape, out of the camera direct into your tv's A/V input. You can then throw the tape in the drawer and pull it out next year and see how much the kids have grown. All simple stuff, simple storage of your memories and great for family footage.
If you use a DVD recording camera the principal is the same but the quality, while still pretty good, is a little down from miniDV due to the compression necessary to record on DVD. If you don't need to edit playback is simple, storage is simple and you don't have to get the camera out to play back your footage.
If you are like the majority of people however you will take far to much and editing will become necessary. Editing will also allow you to become more creative and quickly have video as one of your hobbies. You will then be able to make compilations of little "Jonnie" growing up "his first 10 years".
Once you start editing, you will need the original to be the best quality possible as each time you convert standard, and DVD may be your end storage medium. you loose quality. Tape is cheap and easy to store. While I admit I am a devotee, I still believe miniDV is the best.
Once you have to download to your computer for editing, there is not too much in it in terms of difficulty. There is some pretty good and non expensive editing software out there which will handle most formats and allow you to produce your final epic onto DVD.
Cheers and Merry ChristmasÂ
