Ok chaps I'm gonna share a bit of what I know here because I can see 2 distinct scenarios appearing here and we need to diferentiate between them.
The first is just to archive some old VHS or DV camcorder tapes. You don't want to edit them (except the odd dodgy cut editing with the remote). Best bet is a DVD recorder or HDD/DVD recorder combo. But be prepared for some stuff you hadn't expected such as chapter markers and trimming maybe only working on the system you did it on etc. It isn't plain sailing even with this simple option.
Second is if you want to actually CREATE a DVD with edited footage, menus, chapter markers, labels and so on. This is entirely different approach and requires several stages, half your waking life and the patience of a saint but can be immensely rewarding when you get it right.
The stages for option 2 are capture, edit, encode, author the DVD then burn to disc. All are seperate in essence although some programs may group some of the processes together.
Capture: this is getting raw media into the PC and might be by firewire cable or by analogue capture card. It could be via a gizmo like the Dazzle DVD which started this thread but you might already have suitable hardware to do this without knowing it. For example If you have a camcorder connect it using firewire and it'll save you an age of messing about with codecs, compression etc. Just capture using PAL DV settings. All parameters fixed already. Also, many camcorders also let you 'pass through' so feed a VCR into your camcorder and you can do same for VHS' too. Often overlooked is that feature!
Once you have your raw media (preferably in DV or similar low compression format) use a programme to edit it. Nothing to do with DVD yet this is the video you want to make. Don't dismiss Windows Movie Maker. It isn't exactly laden with broadcast features but it is free (check for updates too) and you can make a decent video with fades, music and so on. When you're done you'll have a single file which is your video.
Now to encode it. Oh yes, you thought you could just burn it to a DVD and it was all finished but no, you have to get it into the correct format. Editing is easier with AVI or Quicktime files, but DVD (ideally) wants a special form of Mpg2 called elemental streams where the video and audio are seperated. I use Tmpeg encoding software for this but it isn't free. From experience, cheap or free encoding software will give you results showing what you paid!
So anyway, let it encode while you shave and get a haircut (you'll need both if you got this far).
Then you take your encoded files and 'author' a DVD by adding your newly encoded files to authoring software (I recommend DVDlab if you are a keen amateur - made by mediachance....google it ). Here you will make menus, chaptermarkers etc and the programme will probably create 2 folders in a special structure which you can then burn to a DVD using Nero or similar.
So.....you still up for it?
To be fair, something like the Dazzle will take most of those stages and using its own software, combine most of them into simple wizard-driven tasks. For many being guided through step by step is the prefered way. Whichever way you go, it's not a simple case of burning a DVD like you might burn some pictures to a CD for archive.
As mentioned, editing your own films and authoring your own DVDs can be hugely rewarding. But be aware of what's involved before parting with cash as you might just find the whole thing a complete pain in the rear and wish for your VHS tapes back!
I would also read the reviews of the Dazzle on Amazon to see how everyday users find it. They read exactly as I thought they would. The idea of "plug it in and bingo! a DVD", made me rub my chin I must confess.