I did this (transfer VCR tapes to DVD) using an external capture device. Here is the link: http://www.hauppauge.com/site/products/data_hvr1950.html
I preferred the external device because I can move it from computer to computer. If you don't need that flexibility, then you can go with an internal card.
You can always utilize the DVD burner in your computer to create the DVDs after you capture the video from the VCR by using a capture card/device. The capture and transfer process is quite time consuming.