For my money, the answer to both your threads is the same. Get a set-top DVD recorder. For capturing analog video/audio from a VCR, you need hardware and software, the combination of which will easily equal or exceed the cost of a recorder in order to get equal or better results.
Add to that the fact that capturing and converting video on a PC means tying up the PC for long periods of time, maybe many hours for each recording.
Most of the entry level set-top recorders can produce excellent quality, given good quality source material.
If you're determined to capture and convert video on your PC, you will need hardware and software for capturing. Most capture devices come with software for capture and conversion, but they never really do a good job for all things you might need. I'd recommend Scenalyzer for capture, and Canopus Procoder Express for a newbie needing to convert to MPEG quickly and cleanly. You'll still need an authoring program to burn DVD-Video, TMPGEnc-Pro Author is pretty popular. If you buy those 3, you've already paid for a set-top recorder, and still need the hardware to capture with.