Agreed. If All you intend to do is capture from VHS (or similar) and then add a menu (or seven) then I think you have the right idea. Capture and convert to MPEG2 and save the editing stage.
Of course, the moment you find something in the footage you want to change (i.e. re-introduce the editign stage) then you'll have to re-capture to AVI so you can edit it).
Maybe you should offer two products for your company on this. Firstly a simple capture and master as DVD. and also a second product where you offer a clean-up process on the footage as well.
And, for the record, I use a Matrox RT.X100 to do my realtime conversions and exports to MPEG2. However, As much as I like this card (and I really do) it is much better to have a system built around it rather than buy the card and attempt to install it into an existing system .
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