Yes, you will need to encode the video to a new format for easy web browser based viewing. I would suggest getting a DV camera and a firewire card for your computer (if it doesn't already have firewire). DV cameras are very easy to interface with existing movie software and won't require any conversion from the tape to the HDD. Windows movie maker (free) allows you to make rudimentary movies and encode them to WMV (as well as pull video off the camera). Quicktime and DivX are other popular internet formats (encoders may cost $).
http://www.videohelp.com/ is the place to find all your answers (basic to advanced).
