Old post I know, but thought I would stick my two pen'orth of oar in with a mixed metaphor:
The kind of datarates you would be looking at for your purposes are around 500 megabytes an hour. the image on the best of CCTV cameras, under IR illumination, is not great enough to warrant DVD-like recording rates!
So, if you wanted to leave it for 4 hours then you have plenty of space. About 2GB a night.
I don't see this as much of a HDD-fragmenting activity either, as you are using very little of the space anyway. So, no real advantage to a second drive.
However, if you stuck in, for example, a 200GB drive (around £65-70) then you could store several months of CCTV recordings on there. Might be useful, might not be.
But as it is, you have enough space to store several nights of video on your computer. Perhaps you could use a DVD writer (around £30, even £25 if you shop around) to archive any particularly "interesting" nights of footage ready to hand over to the police/council?
PVR cards are getting cheaper all the time. I was going to suggest using a plain old TV card with some software called "Dr DivX" but to be honest it wouldn't save you any money and would potentially be a source of hassle. So I won't suggest it!