Family Videos on DVD into Final Cut Express and external hard drive?

I have family videos that were transferred from video tape to DVD. I now want to get the DVDs into Final Cut express to make movies.
1. I am using mpeg streamclip -- what format is best to save to disk to work with FC express? DV or QT? Other?
2. Is it faster to use an external drive (firewire) or the main hard drive of my computer? I have an iMac (intel, very first one) as well as a recent macbook pro 2.33 GHz core duo)
3. I have an external fantom drive (1 TB) that I had connected to an airport extreme, and used briefly with user login as a central server. I now want to connect this to my iMac, but with some files I get "error code 0" when I try to copy them over, and others will work. I had hoped to keep all of the dVD files which I anticipate will be large on this drive. Anyone know what this means? I do also have a 500 GB G drive which works perfectly, but I suspect is not as fast.
Thanks to anyone who can help. I am new at this and excited about making the movie, but not about the learning curve -- had been proficient with iMovie until the new version came out.
thanks
Paul

I don't know how new you are to Streamclip but there are 2 DVs and the one you want is got via QuickTime as Tom said.
When you drop your DVD files onto Streamclip and go up to the File Menu you will find "Export to QuickTime" and "Export to DV".
The second one, I believe, is for iMovie but for FCE you click "Export to QuickTime" and in the window that opens you alter the "Compression" setting from "Apple Motion JPEG A" to "Apple DV-PAL" or "Apple DV/DVCPRO-NTSC" as appropriate.
You can usually leave all the other settings alone, click "Make Movie" and wait !

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