The SONY VCR I am using is a PAL only deck that came bundled with various attachments for USA use. The unit has a SCART OUT and a SCART > RCA adapter if that matters.
Connect via RCA cables to Honestech capture device.
Open up Honestech software and choose Advance Mode. Set Capture Format to MPEG-2 & TV/Video Standard to NTSC. Recording Resolution 720x480 [highest option].
When ready to output I choose "User Defined Settings" then HD MPEG. Format: MPEG 2, Resolution: 1920X1080 [1280X720 also an option], Aspect Ratio 4:3. Then I click "Advanced" and I choose "deinterlace [source]". Sample rate 44.1 Khz [also options for 48 & 32 Khz], Bitrate 320 [380 also an option].
However I think the Donovan clip was done at 224 bitrate. I tried 320 on the upload after that one here;
https://www.youtube.com/watch?v=8XsvxMsi24A&t=2295s
I have tried doing everything I listed above [224 bitrate] and setting to PAL in Honestech but I got the same problems I described in the OP: color streaks and combing.