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In my view the best way has already been mentioned:
VHS Player -> Timebase corrector (I use a datavideo DAC 1000) -> DV Capture Box (I use a datavideo DAC 100) -> firewire to the computer and store as type 2 DV files. This will use 13GB per hour and keep on two separate hard drives as these will be your masters. Then use neatvideo to knock out any objectional noise and virtualdub filters to massage colour/contrast to taster. Mpeg2 the lot at a minimum of 6 or 7 Mb/s and DVD author to a quality disk. I bet the end result will look better than the original.
One thing I discovered...real old VHS decks seem to have had wider head gaps and playing there tapes on modern machines (particularly SVHS decks) results in a good deal more visual noise - hence neatvideo is a god send.
Attached is a raw DV screen grab from a Porta-pak recording made in 1984. For a quarter century old VHS recording I think this is a good starting point.
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