The Photographs are very easy to insert. Most Video-editing programs (like Ulead and Adobe Premiere) are based on a timeline and you can drag and drop the (scanned/digital) pictures into the right position. You can also specify the duration of the picture (how many seconds it should take in the video) and add transitions between them. The pictures will only be in the video-track off course, but it’s very easy to drag an audio file to the audiotrack; background sound/music while the pictures are shown.
As for the VHS-tapes, you’ll need to capture the clips first. Since you want to create a life-lasting DVD with very valuable personal material, I would suggest the “best” option and get a PinnacleDV500 or editionDV. With these captureboards, you’ll be able to transfer the VHS to a digital file in the best possible quality.
These boards aren’t exactly cheap though, so if quality isn’t really that important, but the budget is, a PCTV card might be an option. The capture-quality is lower (lower resolution, vague colours, ugly artefacts,…) but those cards cost only 100 - 150 $.
Good PCTV cards (with video-in) are Hauppauge and PinnaclePCTV.
You’ll need to decide this one yourself; DV500/Edition <-> PCTV card
The captured clips can be edited and inserted on the same timeline as the pictures. For Adobe Premiere, reading a basic manual would be a very good idea ;). When the original VHS-sound on some clips is noisy (wind) or you’d like music in the background, you can erase the original audio track, or add a second audiotrack with imported files (the same way as adding sound to pictures).
I don’t know if Ulead has this feature too, but Adobe can export your timeline to DVD-compatible MPEG2 with his built-in MPEG encoder. So when you insterted and edited all the footage, you can save the project as one big file, that can be burned with DVD-authoring software.