Bought a Pinnacle Studio 500-USB yesterday to do the same thing. I'm trying to learn how to use it right now. It includes the software and an analog capture device. It was $79 at Circuit City (including a $20 mail-in rebate). It takes a relatively powerful computer, DVD burner and a USB 2.
It hasn't been easy and I've had no success in getting that VHS to my DVD. My computer is very fast and is built to handle these tasks.
I do have great success in capturing video from the mini-dv-camcorder and editing into fine little movies, but no such luck yet with this Dazzle thing.