Here's my experience... I have a standalone Lite-On DVD recorder with FireWire, as well as the ADS InstantDVD 2.0 box (which is comparable with your Hauppauge capture card, except that it's an external solution).
The ADS is analog, using regular coaxial A/V cables; the Lite-On is fully digital, via FireWire... As I was looking for ways to back up my Digital8 tape collection, I started to wonder which of those two devices would be better... So I copied the same tape twice to DVD, using both methods, and here's what I found:
ADS - more control over bitrate, more control over colors and contrast. Excellent video results overall. The soundstage, however, seems a little congested (may also be a result of MPEG audio encoding)
Lite-On - better sound, from a spatial point of view (possibly because of Dolby Digital encoding). No color correction whatsoever - whatever the camera sees is what you end up with, on the disc. The serious video downside is that you don't have enough bitrate control, and the drop between 1-hour recording and 2-hour recording is quite significant, yet unavoidable for 90-minute tapes.
As you can see, there are advantages and disadvantages to both solutions. It's up to you to come up with a suitable compromise. I tend to favour the ADS, personally