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I just did over 30 hours of footage from VHS by playing it in a VCR and running that through a camcorder via the AV/IN-OUT so I could use the firewire connection. If you don't have the firewire connection than you can use a capture card that has composite input jacks and plug your VCR right into it. Dazzle makes an external one that is pretty cheap and works decent if you need one.
The software I use is Premeire and/or Pinnacle Studio 7.0
depending on what I am doing and I usually capture the video in the highest quality possible then re-encode it to the correct compression and size I want as an end result.
Hope this helps.
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