I considered both. Now, I am glad, super glad, that I didn't get DVD.
DV is cheaper and offers better pq. Sound? They should be the same, but the big variable is that most cameras have poor mics.
I can't imagine editing on the camera, it makes so much more sense to do it on a camera. Hey, you might delete something you want later!
A 120 will cost less than a dvd cam, maybe a lot less. Take the diff and get a good computer. You'll also save by using cheap dv tapes instead of those expensive and sometimes hard to find mini dvds.
I transfer my tapes (quite easily) to DVD with my Sony Vaio. I keep the tapes in a safe place and the dvd's look as good as the onse you rent. I have had no problems with my DV tapes, but do keep in mind that no one really knows how long DVD's will last. Depending on how they are stored, they could start breaking down in a as little as five years (according to Kim Kommando, the digital goddess). So, it is always good to have a backup, something that mini dvd won't give.