If you want to go cheap here's what you do. Get this or a similar product ADS DVD Xpress. My neighbor got this. It only worked by using the software that came with it. Video looks great. I recommend capturing it at DVD quality (even if it's not). It just looks better. This assumes you have a USB2 port.
Another way, this is what I ended up doing, I purchased a new camcorder and made sure it had Passthrough Technology. This feature allows analog devices (older camcorders, vcrs, etc.) to transfer video from them to the camcorder or PC. I'm putting my old VHS and 8mm on my computer then to DVD. It's very easy once you do it a couple times. You can purchase a camcorder with this feature for less than $400. This would mean that all your new videos will be Digital not Analog. I recommend this method unless you really like your older camcorder!
The most common problem with analog to digital conversion is audio and video sync. To do this right you want a product that does the conversion with hardware and not software. The camcorder and ADS Xpress have this. Make sure you get one with hardware MPEG2 Compression.
Let us know and good luck!
-JC