From the specs that mplayer provided, the sound is sampled at 7875 Hz and at 8-bit mono. This is very, very low quality sound. Actually it is a little better than telephone quality. Not all sound cards can playback at this sample rate such as on-board sound. If the video is captured from a DV camcorder, the quality of sound should have CD audio quality at the very least. Sample rates should be kept to common specs like 11025 Hz, 22050 Hz, 44100 Hz, and 48000 Hz.
Digital camcorders needs a lot of light to get good quality of video. What you are seeing in the video is digital noise and this noise is cause by AGC (automatic gain control). The only way to fix the noise is to bring in more light during shooting the scene. Cleaning up the noise during editing will take a lot of time and effort. Usually the clean up will make the video quality worst than before. Regular analog camcorders are better when using in low lighting scenes. Go to
http://www.camcorderinfo.com to find the best camcorder for what you are doing.
If video can not be seen but audio can be heard, the correct video codec need to be downloaded first. Majority of people can watch MPEG-1 with out any problems.
Of course video capturing takes a lot of space. DV takes between 1 GB to 9 GB per hour. I recommend using four IDE or SATA in RAID-0 to keep up with the recording and provide enough space. The filesystem that I recommend using is XFS or JFS, but I prefer XFS because it does not get fragmented like JFS.