Here is what I have:

1) VCR tape playing and sending out via channel 3 cable output.
2) ATI AIW 7500 video capture card (with most stable drivers - cat 2.3 - and capture "wrapper" WDM installed).
3) WIN98SE operating system.
4) Virtualdub for capture. 320x 240 size (ideal for TV display?)
5) Installed MACROVISION DISABLE application to turn off susceptability of ATI AIW 7500 video card to macrovision.

I can capture. I think I still see macrovision, but not sure if that is in the display/ overlay, or it is in the resulting AVI file. I can pick the video codec. It all works.

BUT>>>>

1) What file size wall will I run into when capturing large video files? is there a modification for win98se to fix this?
2) The resulting AVI file is played back on XBMP via an xbox, and the image is blocky.