You're going to have to get an external tray-loading drive. You can edit video shot on DVD camcorders (I've done it for clients several times), but it's not exactly a straightforward task. DVD-camcorders aren't really a good choice if you're planning to edit the video you shoot with them. A miniDV or Digital8 camcorder is a much better choice for that. Of course, you've already got a DVD camcorder, so I guess you should just make do. Next time you buy a camcorder though, strongly consider one that uses tape.
In order to edit your footage, you're going to have to rip the dvd to your hard drive then demux it, then decompress it, then (possibly) resync the audio with the video. This process results in a quality loss, especially if you burn the result back to DVD because you've uncompressed and then recompressed previously compressed footage.
