Aaron,
Sorry, I have to take back my suggestion about Nero. It only allows me to capture as mpeg, which after doing some testing and research, is very difficult to work with in premier. Nero captures to mpeg because this is the best format for burning a DVD, but is pretty bad for editing (Nero is not an editing program, so why would they care?). I could not render my mpg clips, and my computer would just about lock up every time I tried to play the clip.
More ram will not help...I have 1 gig now, but this is not the issue. Yes, 11 gig should be enough space to work with a fairly good sized movie. Try working with a small clip first to see how much space you'll need.
Instead of Nero, I ended up using windows movie maker. I capture as a .wmv file. Then drag and drop to captured clip into the movie timeline. Next, save the project, and when it asks you to specify a format, chose dv/avi, which runs very nicely in premier. You have to do this for each clip, but it's 100% better then trying to deal with mpeg files.
Read through the premier forum on adobe.com and you'll find that premier works best with dv files (.avi) and more info about this. Let me know how you make out.
John