For HDV, the faster the processor the better.
A better graphics card will help, but is not as important as the processor.
With an iMac, you are in a bit of a conundrum for drives.
Although you have lot of space on your internal drive it is not wise to have one drive running the system, the app, and pushing the media. People work this way, but it is not ideal. It is prone to dropped frames and other forms of editing sadness.
USB drives are not recommended, though some do fine. It has to do with the way they deliver data, not their overall speed. Again, you can work this way, but if you have troubles with dropped frames, look here for the cause.
Firewire drives are great for the edit, but during capture they are sharing the bus with the camera. Not ideal.
So, pick your poison.
The camera is supported by Final Cut Pro 5.x. I do not see it on the list for Final Cut Express, but it may work.
https://images.apple.com/finalcutexpress/pdf/finalcutexpress3.5_qualdev.pdf
Best,
Tom