If your 7800 GT supports video in, then yes.
Most 7800's will have a TV out put on them (for watching on TV) but very few can capture video as well. You might need to purchase a separate video capture card to do this.
As far as cables, you'd need a video cable (svhs or composite, depending on what the card supports) and an audio cable (for audio you'd need stereo RCA to single headphone jack adapter).
1. Plug the video out from the VCR into the video in of the 7800
2. Plug the two audio outs from the VCR into the single stereo headphone jack input on your sound card
3. Capture the video. The free tool Virtualdub does this well
4. You need software to export this video file to DVD. Expensive versions of NERO will do it, so will Adobe Premiere, I'm not sure if Windows Movie Maker will though.