Movie Studio / Edit Studio / Movie Maker 2 w/ DVD Lab advice

[pickleps]

Hello

I am looking to upgrade my DVD software (I would like to keep it under $200). I have been using Movie Maker 2 (for capture and editing) + Sonic (for menus and burning).

The main use of the software will be to capture the video from my Sony mini DV camcorder (via firewire card), then edit the movies (mostly home movies) and burn to DVD.
Most important features are the ability to add music to menus and to make chapters out of movies. For this, i have pretty much decided that DVD-lab will be my choice software. So the rest of it is where i am looking for input...

I am looking into two different choices, and wanted any advice you might have.

Option 1:

Continue using Movie Maker 2 for capture and editing (don't really have a problem with it, though it seems to be slow sometimes and i have read other programs are better, are they worth the $), get DVD source creator to encode AVI to MPEG. Then get DVD Lab for DVD creation and burning.

Option 2:
Get Screenblast Movie Studio or EditStudio for capture, editing, and encoding and then get DVD Lab for DVD creation and burning.

Last question, when capturing, I have been doing it at 720x480 figuring that will retain the best quality. Would capturing at 352 x 480 or 352 x 240 produce the same results?

Thanks very much for any help and/or suggestions!

[pickleps]

Should I move this question to the editing forum? Thanks.