I've seen and have footage recorded off TV before and it looks decent/good enough for me. And I really don't want to buy a dvd drive, because I'd only use it for AMVs. If after i get the right capture card and the quality sux i guess that i'll have to get the DVD-rom drive
"Looks good enough for me" is not a valid metric when it comes to video editing. There's lots of things that the eye cannot see in unedited footage, but start making significant changes to your source material, and defects in the captured video will quickly become appearent.
But, hey, your call.
And composite out, i've never heard of that before. My camera must really suck. It did come with the white and yellow cord. I'll try and search around for one.
You already have one.