If your camcorder uses magnetic tape, then it is analog - no "format" in the digital world.
There are many possible tools to convert to mpg format, but all of them start with digitization - sampling the signal and transferring it to hard disk where it can then be analyzed and rewritten in mpg, DVD, DivX or whatever other format is the thing you wish for.
So, if I'm not mistaken, your camcorder will have to be hooked up to the Video In of a PC - either an image acquisition card, or using the video capture of some graphics cards like ATI's AllInWonder series.
Once the camcorder can be hooked up, you'll need the right software to capture and record the digital copy of your data. That can be something bundled with your PC (ATI delivers something with its AIW cards), or a third-party package like Pinnacle Studio.
Once you have all that done, you can start creating chapters and designing your video, if you want, or just go ahead and "compile" the video to mpg if that is your wish.
I must bring to your attention the fact that today there are DVD recorders for the TV. Hook one up on TV and you can record automatically whatever image crops up. The more expensive of those solutions have integrated hard disks.
If you buy one of those DVD recorders, you have only to hook up your camcorder to the TV, and the TV to the DVD recorder, and let things work. Once the DVD recorder has everything on disk, I have been told that it is simple to convert to DVD and burn on a blank disk.
Why is this interesting ? Because the DVD recorder for TV is streamlined for the task, as are all the components that come into play (camcorder and TV).
On the PC, however, you'll have to consider the data throughput of your CPU, the Front Side Bus and the hard disk, which have been built for many other things as well.
In short, you can have a performance bottleneck anywhere in the PC system, and it will cost you money to remove it and get the video capture quality you want.
In the TV DVD scenario, there is no bottleneck, a lot less components, and a result that is all but guaranteed. It's also straight to DVD, but you can easily find a DVD ripper program to convert that to mpg if you really want, and you'll still be able to bring your videos to your friend's house to show them on their DVD player.
Pascal.