There's one question that needs to be asked.
Do you want to edit your content?
If you don't want to edit content. Then yes, the direct VHS/DVD recorder is probably the best option.
If you want to edit content (say getting rid of commercials) Then your journey will take a longer path.
Either way, as fas I know, you will have to read your VHS tapes in real time. I know of no way to read them in faster.
Let's say you take the longer path. Capture/edit/render/auther/burn.
Capturing. You can capture something in a raw form, taking up huge amount of space, or you can capture in mpeg format. This depends on how involved you want to get into the editing phase. If you only want simple editing. Cutting/splicing. Culling commercials. Capturing in Mpeg format is OK. If you want fancy transitions, scrolling titles, and the like, you'll be more inclined to capture in a raw form.
Personally, I use a PVR-150 tuner card. I can capture directly from cable or antenna, and my VCR (when I have the card tuned to channel 3). It captures in Mpeg compressed format. I've never been much of a fan of the All-in-Wonder card. (I bought one years ago, and it kept locking/boluxing my system). So I like to keep input and output separate.
Editing. This depends on your capture method. If you capture in raw form, then I'd lean towards Pinnacle's Studio software. I use it to edit video I took with my camcorder. If you capture in mpeg format there are other editors that work. I'm happy with mine, but I can't think of the name off the top of my head. Starts with "M" I think. Editing an mpeg format file(s) is more like defining bits and pieces of my input file(s) and gluing them all together in an output file.
Render. Rendering is part of the editor, but I put it separate here. If you capture in raw form, Rendering takes serious horsepower and time. If you render in mpeg format, then not so much. An mpeg render simply takes the bits an pieces of input and writes them out to an output. I do have some transistions. I usually do a "blend" from one scene to another. It takes less then five minutes to render about an hour of output. There's a definite slow down when I run across a transition. But still only for a few seconds while it works on that particular transition.
Authoring. This where you make layout of the DVD. There are a bunch of authoring software out there. Shouldn't be hard to find one.
Burning. Sometimes built into the authoring software, sometimes not.
I hope this all helps....
TO dig deeper, I'd suggest you follow some of the links already posted in this thread...
Good Luck