Hi there. Vista comes with the latest version of Windows Movie Maker, which is fully compatible with HD video. However, it all depends on what CPU and graphics card your PC is running. If your components are low-end, you may have trouble editing HD video.

Check your computer's Windows Experience Index base score, which can be found in the Control Panel. This will give you an idea of whether your computer can handle HD files or not. (The base score should be 4 or higher).

External microphones are usually only found on expensive camcorders - $1500 and up. If you're looking to pay only $1000, you may need to stick with in-built audio. As for battery life, you won't get multiple hours out of a single battery, regardless of which model you buy. You should probably factor the cost of an additional battery into your purchase.

Do you know what HD video format you want (i.e. - HD tape, memory cards, hard disk drive)? Let me know, and I'll make some recommendations.

Regarding old VHS tapes, you need an analog-to-digital video capturing device. Try this:

http://www.goodgearguide.com.au/review/digital_video/magix/rescue_your_v...

It's cheap and relatively straighforward to use.