The word firewire is actually a term that Apple coined for the technical standard known as the IEEE1394 interface. Firewire, IEEE1394, and Sony’s iLink all refer to the same high-speed interface that connects data devices together. It is similar to USB 2.0, but it is more appropriate for the transfer of video "data" from a digital camcorder because firewire is able to maintain a consistent high rate of transfer. Transferring video to a computer in this manner is commonly referred to as digital video capture. Another advantage of firewire is that the transfer of digital data from DV tape can be controlled by the computer. The capture software can communicate with the camcorder, so you can press record in the software and the camcorder receives a signal to start playing automatically.
While firewire connections generally only come on cameras that use the mini-DV tape format, there is another advantage of having a camera with firewire. You can record live video directly to the hard drive of a computer, or use the camera as a high quality web cam by using the firewire connection.
Firewire ports are standard on all Macintosh computers, but they may not come as standard on a PC. Inexpensive cards (less than $30) can be purchased if your PC does not have firewire ports. Below is a photo of a typical PC firewire card.
You will also need a firewire cable (as illustrated in the top photo) to connect your camcorder to the computer. Typically a camcorder has what is known as a 4-pin firewire port. The end of the cable that goes in that port will look like a small square with a dent in it. The other end of the cable has a 6-pin connector. It has one rounded end and can only be inserted in the firewire port of a computer one way.