Compress to mpg while capture

If you only have small free hdd space, most video editing software (I use ULead and Adobe Premiere) let you compress the video to mgp format (mpeg1 or mpeg2) while capturing the video from your camcorder.

Compress to MPEG1, the file size will be about 700mg/hour, to MPEG2, about 2.5G/hour.

However, if you want to edit you video before creating DVD or VCD, you should capture the video in its raw format (12G/hour) to preserve the video quality during editing although above mentioned (and other) video editing softwares let you edit mpeg1/2 video as well.