Hi,
If you go the PC route, don't buy anything from Hauppauge or Pinnacle... Just my opinion, but all too often, I've bought hardware from both these companies only to find that the software is incomplete and/or buggy, with updates nowhere to be found despite hundreds of complaints in the respective forums...
If you want a relatively cheap way to get analogue stuff to MPEG2, have you considered a basic DVD recorder? Once it's on disc, you can import it directly into most Windows-based video applications and carry out editing, tidying up, creation of nice menus, etc, from there...
- Ali