I have an original GoPro Hero, not the new version, I consider it more of a toy than a serious camera. I'm very much into photography and normally shoot with a Canon, which I own 3 of.
IMO there is no comparison, the GoPro people made a nice housing and accessories but they skimped on the lens, without very good light your quality suffers greatly, also there is a fisheye effect which I guess can be corrected with another lens attachment, but why would that be necessary in the first place.
On the other hand I've read many good reviews on the Hero 3, maybe they improved the glass on the newer one.
As far as editing is concerned, I believe my GoPro videos come out in quicktime format, not compatible with Windows Movie Maker, I tried several converting programs but the quality always seems to suffer. I also downloaded several editing programs but I am now convinced you need to purchase software if you're really going to get into it.
Sony Vegas seems like the best out there now, you can do plenty with it although the learning curve seems a bit steep and I'm not at all computer shy. The prices on software has gone down a lot in the past couple of years, now you can get good quality video editing software for around $30, not too long ago they cost in the hundreds, competition must've driven the prices down.