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Granted this thread is a few weeks old, but I just want to offer my two cents.
Personally, I don't like to work with the VCR/DVD decks. If you want to do any kind of video cleanup after using one, you have to worry about dealing with the compression artifacting from the DVD and any added again by re-encoding.
It might make me sound like a masochist, but I still use capture cards based on the tried and true BT878 chipset to get complete control of the incoming video signal and store it in a lossless format like HuffYUV or Lagarith with the audio as uncompressed PCM. From there I can do any color adjustments or video noise reduction using VirtualDub or Avisynth as well as audio cleanup in something like Audacity. Once I get something I'm happy with, then I can encode it in a final format and archive the lossless copy.
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