I messed about with a couple of cheap options without much success until I finally took the plunge and bought an ADVC 110. I have never looked back since... great bit of kit and perfect quality. I capture in AVI format and then compress to Mpeg for DVD burning. I am not sure if you can capture AVI format via a Digital Camcorder? I think it is compressed to Mpeg as it passes through?

Personally I prefer to edit in AVI to keep the quality at it's best.