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After never having owned even a VHS video camera, I took the plunge about a month ago and bought a Sony-TVR38 digital camcorder. I did a lot of research before buying. It records Mini-DV digital tapes. You can download the video directly to your hard drive via USB or Firewire cable (I had to buy a firewire card for the computer). Of course, you can play it directly from the camcorder on a TV.
I bought this with the intent of recording video, editing it on the computer, and burning DVD's for distribution to family & friends. MicroSoft's Movie Maker II is video editing software that you can download for free. My Firewire card also came with video editing software.
Although you mention your family doesn't have DVD players yet, at less than $100, they are the wave of the future. I also presume that by "DVD writer" you mean "DVD burner". You are already one step ahead regarding equipment/hardware. Besides - won't you need a second VCR to make VHS copies? If your VCR has the three port audio/video connection (yellow/white/red) you may be able to record the video directly to VHS during playback - I have never tried this, but you may want to ask a salesperson.
Having digital copies also allows you to send video as an e-mail attachment.
P.S. - interesting tidbit I picked up in my research - Consumer Reports did a survey that showed the average family that owned a video camcorder only uses it twelve hours a year. I hope you and I can do better than that!!
Good luck.
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