If you plan on doing any editing to the captured video, and if you have a digital camcorder (or can borrow one), the process will be much easier. You would connect your VCR into you camcorder via the video input to the camcorder (usually a yellow jack, I think), then connect the camcorder to you PC via firewire. If your camcorder/pc have these features, you'll be able to capture the analog tapes to DV-AVI format, which is much easier to work with in video editing software. My VIVO captures the video as mpeg, which is very very difficult to work with in video editing programs.
That being said, before I had access to a camcorder, I used windows movie maker (WMM) to capture from my VIVO card. WMM will let you export you video as DV-AVI, making is usable in other software, but this process is time consuming.
On the other hand, if you don't want to do any editing (such as transitions, cropping scenes, or adding effects), the mpeg format is acceptable. This format will translate well to DVD.
For editing software, I am currently using Premiere Elements, which is package with Photoshop Elements for about $90.
John