Holy crap there is a lot of info here that I'm thoroughly confused now.
I have a Sony Sony DCR-HC40 and a TR3300 Hi8 camcorder. I have a lot of the Hi8 tapes and very few of the DV tapes. What I have done so far is basically run the Hi8 through the HC40 and the HC40 plugged into my PC via a cheap firewire PCIe card, so far so good and I can see the video on the screen. I've used sclive to capture the video into an AVI and looks OK, used VirtualDub and also works.
Question is will the video look better if I get a USB capture device and go directly from the Hi8 to the USB converter? Looking at the Elgato Video Capture - Digitize Video
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It really depends on your eye. DV has lower color resolution that some people notice and some people do not. DV is also a lossy format; with a USB converter, you can save lossless or losslessly compressed ó if that is important to you.
No idea if that is important, I'll have to research. Just trying to get a butt load of Hi8 tapes on to my file server so I can view them on my TV so I can remember what life was before kids
Keep in mind: whatever effort you put into it now will be reflected forever in your digital copies.