Dude,
I messed about with cheap USD converters for months and to be honest nothing worked how I wanted it to work. Either the quality was rubbish or it would lock up or I would get loads of dropped frames. I finally took the plunge and bought a (firewire) Canapus ADVC 110 (Just less than £200) and I have never looked back. I can copy hours of VHS and Hi8 video with out dropping a single frame straight to AVI files and the quality is exactly the same as the source material. Never once have I had a problem because it is such a realiable device + you can use it to monitor on you TV during playback which is better than using a PC monitor as it allows you to check the contrast, brightness and Hue etc.

You can buy a cheaper version (Canapus ADVC 55 - £130 - £150) but that will only stream your video in to your PC and will not allow you to feed a TV monitor).

I wasted a lot of money before I bought the Canopus... it only I had the forsight to buy one right from the start!

Good luck mate!