Be careful when encoding video, for two reasons:
1) The codec you use may or may not be around in 20 years when you want to view the videos. I archive videos from time to time using the Theora codec (as a .ogg file), which is open source.
2) You are introducing lossy artefacts into the video for the sake of saving space, which will be much less of a consideration in the coming few years.
I capture analog video all the time for the purposes of professional editing, and shoot to/ capture from MiniDV, which uses a fairly mild compression and uses ~13GB/ hour. Encoding down to a DVD MPEG stream will cut that down fractionally and still look very good, and afford you some measure of confidence that the codec required to decompress the stream ought to be around for a generation or so.
My advice is to get a reasonably priced Firewire based capture unit that will create files using the DV codec (~13GB/ hour). If you have space enough to hold that much data, I'd leave 'er as is for archival. If space is a consideration, though, I would use a DVD authoring program to create the files necessary to burn to DVD (they'll be .mpeg files, even if the file extension is not ".mpeg". You can play them in most media players.) at somewhere between 4 and 8mbps (megabits per second), depending on how much video you'd want to squeeze onto a DVD. Any lower than 4mbps and you may start to see loss in the video quality, and any more than 8mbps and you may run into compatibility issues with some DVD players. You can then burn the prepared DVD from your hard drive to a DVD using whatever software you wish, *and* you still have the prepared files on your computer for archival and computer viewing.
