Every now and then, somebody asks this question... and every time, my answer is the same:
Get an ADS USB Instant DVD 2.0.
It does excellent hardware MPEG2 encoding, and it can tweak the image quite efficiently. And you can always upgrade the videocard, and keep the device unchanged.
Over the week-end I made an experience. I ran a Laserdisc dub through FireWire directly into my computer, and converted the resulting 25 GB .avi file to MPEG2 with Canopus ProCoder (the best encoder, IMHO) at Mastering quality and 4800 Mbps VBR, in 18 hrs.
I also ran the dub through ADS at 4.5 Mbps VBR - obtaining DVD-compliant MPEG-2 file in real-time.
Much to my surprise, the Canopus output was WORSE than the ADS. That`s right, WORSE, although the bitrate was slightly higher. The ADS did a wonderful job with details, contrast, and overall image aspect, not to mention it produced no visible encoding artifacts.
I doubt ANY VIVO video card can attain this level of quality.