I found that either way, a VHS to DVD player / recorder stand alone unit is best.
Here is what I do.
1) VHS (or 8mm in my case) to the DVD recorder. Made chapters at each major break in source material. These serve as my masters.
2) Rip the master to the PC and edit (fancy overlays, music overlays, etc) and author and then burn to DVD. These are my presentation DVD's.
3) Make an ISO of the edited DVD to produce more copies.
This way in case I don't like my editing down the road I can go back to the original master DVD without having to wonder how the quality of the VHS looks now compared to when it was originally recorded over to DVD.