Welcome to the forums Vanessa.
You are best placed to capture in lossless DVI settings. This is especially true of cone film transferred to VHS as you wouldn't want to further degrade the quality.
Once captured you should then set your ULead project settings to DVD compliant Mpeg. Set this at 8000kbps variable. If you would likea detialed walk through on this please post back.
COMPAQ something or other with 500Gb Boot Disk, 1Tb external Firewire Disk, 4Gb Memory and a super duper sound card, 19" TFT Monitor etc etc etc
Sony TRV33e : Sony TRV310e : Canon XM2
Sony Vegas Studio editions to v11
Remember, there is always more to learn than there is to teach.