Your 1995 time frame might be a bit off. Either that, or something has happened to the original videos since 1995. In 1995 the video content available on the internet was in its infancy -- in any event, mpeg4 video with h.264 compression were not available in 1995.
If they were originally recorded to VHS, then half of the original interlaced video information from those recordings has been removed by deinterlacing and saving in seriously lossy HD compression at half-image size. The original interlaced TV broadcast might have been interlaced 640x480 at 4:3 broadcast ratio, but the video is non-interlaced 352x240 at 2:3 aspect ratio. The audio is 44.1 KHz variable bitrate, which will be a problem in VirtualDub. Even after cleanup (which won't get very far after video has been mutilated to this extent), the best you can get is small frame playback for PC only.
Your PC should be fine, but the 160-GB is going to get filled very quickly. I don't understand the "+ 1 gig" drive size. Is that a mis-type?