As others have already stated, you should have at least two hard drives for video editing. One will be used as your system drive, with the OS and programs, while the other will be strictly used for storage and as a scratch disk. Then, get a decent firewire capture card (TI based) and you should be good to go with any NLE, including Premiere. However, if you are this new to DV editing, I would suggest a cheaper, basic NLE like Ulead, or perhaps an old version of Premiere. No need for you to spend $500 on an NLE to edit simple family videos, etc.
Also, make sure you are using 7200 RPM HDs. Although 5400 RPMs should be plenty in theory, you can still drop frames, especially if running other programs in the background.
The only time you will really need a lot of processoring power is during the rendering of your videos. Any 2.2 Ghz P4 and up should be fine for previewing your compositions, and anything above will simply speed up the final render. Unless you do a lot of video editing, there is no reason to spend the extra money on a new processor just to save 5-10 minutes.
Spend the extra money on a good set of HDs and a decent amount of RAM (512MB-1GB should be fine), then worry about the processor