All the Canopus capture devices output the footage in DV, so that's what iMovie or FCE will use. After the capture, you obviously have the option of outputting the footage in a myriad of files. When I converted my home movies, I wanted the best possible output for archiving reasons, so I output everything as DVCPRO50.
HDD space is not so much an issue with standard definition DV. I have about 20 old tapes and they only ate up about 400 gigs on the hard drive. I would venture a guess of 20-25 gigs per hour of video, though it could be more or less.
As for HDDs, I recently purchased this off of Amazon.
http://www.amazon.com/Western-Digit...2?ie=UTF8&s=electronics&qid=1232517900&sr=8-2
It's only a USB 2.0 HDD, but that's more than fast enough for simple DV capture and output. And, you can set it up in a RAID configuration so you only have one external hard drive cluttering up your desk.
And if you can, definitely spring for the Canopus. The hardware encoder built into the box will give better results than any camcorder can. Especially if you're trying to capture old home movies or something similar, you want to be able to preserve the memories in as good of quality as possible. It's a time-consuming undertaking, and you don't want to have to repeat the process because you're unsatisfied by the results. That happened to me when I bought a Pinnacle Dazzle Platinum. Okay device, terrible, terrible software.