The one thing that stands out is using a USB device to convert your analog video. Very few people are happy with the video quality from this.
I suppose it's possible someone has finally come up with a good USB based converter, but I haven't heard of one yet.
Such devices are fighting several battles, one is controlling cost, the next is power consumption (USB 1 or 2 has a max of 2.5 watts, typical is .5 watts) and tied in with that is digitizing and compressing at full frame rate and frame dimensions along with digitizing the audio at a high quality rate.
Many USB based converters will cut quality on one or more of these.
I recommend a PCI based converter card. I use Hauppauge's PVR250 for analog conversion and it works very well. It produces high quality MPEG2 video at up to 12Mb/S and MPEG1-L2 stereo audio at 48ks/S (384kb/S) in real time while only using 30% or so of my system resources. (Most of that is due to decompressing the video for display, the actual compression is done in hardware chips that only use about 5% of resources)
Fav quote - "Experience is whatcha don't get 'till ya don't need it no more."
System - Athlon 1.4GHz, Win98, Hauppauge PVR250 receiver and compressor.
Software -Magix Movie Edit Pro 10, Nero 6 + NeroVision Express, Moho 4.61, PSP 8.1, Bryce, Quicktime 6.52 pro, Goldwave 5, DVD-Lab.
Cameras - Panasonic GS9, Canon ES8400V, Canon EOS D20 and Canon A70