The best format to "capture to", is to keep it in the format it is in now. Use your camera's Firewire or USB port to copy the DV file from your tape to your computer, bit for bit. In this way, you have not lost any details (yet). Always try to preserve the original as much as possible until the last minute is the key to good video processing results.
Here's a link to the DV Capturing FAQ and Myth guide from VIDEOHELP.COM:
FAQ They usually suggest some freeware or shareware solutions that you can download and use.
I don't have a DV Camera yet, but if I did, I would probably go back to using Pinnacle Studio. It can do what you need, plus handle all the editing through burning to DVD to will do later. It works great with DV source, version 8 was not so hot with stuff already in MPEG2.