1. YES, you can capture video from an ordinary VHS camcorder if you have the right hardware. I do it with a garage sale variety camcorder and a spare vcr. I have bought an agp card called the ati rage fury pro 32mb with "vivo" that's Video in/video out. The ati driver does work with vid fac 1.0 perfectly at resolutions of 720x480 but seems to miss frames on vid factory 2.0 capture mode at that resolution. Specifically, it seems to capture one frame twice then skip the next frame. It performs flawlessly at mpeg-1 resolutions and below. I'm guessing it's my budget setup---> 700mhz Duron, 192Mb Ram, single 30Gb hd, windows ME, and the ati capture card. I plug the vcr's RCA video composite out to the capture card composite video in. Stereo RCA out to 1/8 inch stereo line in on the computer and so forth. It otherwise works quite well and I've received short mpeg files from frieds with digital cameras that transport quite well.
2. the Ati card comes with "Video In" software that allows capture and it transports easily VF 2.0. For best results use the ait multimedia driver not the theater driver and the ati VCR 1.0 format A word of warning, at 720x480 you'll use 10MB of hard drive space PER SECOND OF VIDEO!!! Make certain you have the space to use this resolution of capture. 320x240 uses 1/4 that amount and has good resolution for training and non-videophile applications. Check sonic foundry to see what files can be manipulated.