I will start out by saying that I am a newbie to video capture, but I have spent a fair amount of time reading in this forum and others. My goal is to capture TV programs via cable, delete commercials and write to VCDs (probably DVDs later on). The PC I currently use is a Celeron 950, 576 MB of PC100 Ram, 60+ GBs of hard drive space on a 7200 RPM drive and a SB Live! audio card. I started out trying to stay cheap by purchasing an ATI TV Wonder card. Either due to the hardware, my inexperience, or both, I was not happy with the picture quality of the VCD on my TV. I carried it back and later saw a sale on an I/O Magic PVCR card (free after rebate). It turned out to be a Pinnacle card in the box. After working with it for a while, I have found that in my system, recording to an AVI file using iuVCR (Huffyuv codec) and encoding via TMPGenc is superior to recording "real time" to MPEG. I found that most of the settings in TMPGenc to make little or no difference so I left them at the default
settings. I recorded at 352x240. Recording at higher resolutions gave poor quality (horizontal bars that did not line up as they should). My questions are as follows:

1) Is it most peoples experience that recording to AVI and then encoding to MPEG is superior to recording "real time" to MPEG?
2) Is there a "sweet spot" for recording resolution for VCDs? Is higher better if your system is fast enough? How about multiples of the base VCD resolution or settings in TMPGenc?
3) Is there a better (same/better quality, less disk space) codec than Huffyuv to use? PICVideo MJPEC or others?
4) Does anyone have experience using iuVCR? Better programs to capture to AVI and can schedule?
5) To get to DVDs later, I may upgrade my PC. What will that buy me other than faster encoding, ability to record at higher resolutions and MPEG2 w/o missed frames, etc?
6) I may use an ATI Radeon 8500 AIW for capture on the new system as I got one fairly cheap ($150). Will it record to AVI? Do I gain anything with it above the Pinnacle I have?
7) Last but not least, what is the best tool for editing out commercials and add menus to videos?

Thanks for the help.