There is ATI's TV-Wonder that records in Mpeg1, not Mpeg2. But believe me, Mpeg1's quality isn't nearly as good. Mpeg2 combines both quality and low bitrate, but needs strong CPU horsepower. You would rather go for AVI's quality, rather than Mpeg1.
As for AVIs, you might consider buying tons of HDD space (100+GB RAID arrays) for raw AVI capture...
That means you'll have to buy fast HDDs, not just truly "Inexpensive Disks" to make up your RAID array. I did some maths on this b4, but I can't remember the exact figure. Something along several thousands of dollars to get the same recording length. Note that raw AVI is abt 20 times larger than Mpeg2 top-notch quality files. That means you'll have to buy 20 HDDs to get equivalent recording length with Mpeg2. A typical 40GB is US$100. That gives you like 10hrs of 8Mbit/s (top-notch Mpeg2) recording (assuming you need 5GB for Win2k + ATI software + drivers installation, actually I used only 1GB). Buying 20 HDDs for raw AVI will mean US$2000. And that's just HDDs alone!
I've calculated a rough US$520 for a "set-top-like" PVR setup with AIW Radeon. Look at my hardware requirements for AIW Radeon post for the basic requirements. At US$520, you can have at least 10 hours of top-notch recording at ONE GO. Quality is far ahead of VHS. Compare this to the US$2000 for AVI capture. Toss in a fast CD-writer and a bundle of rewriteables, you've got yourself a "greater than VHS" setup with virtually-non-degradable "VHS tapes" (CD-RW)!
Going with PVRs, you don't get to pay for expensive VHS tape replacements. VHS tapes typically start to degrade (in recording quality) after merely 5-6 passes. Your HDD holds digital data of your recordings --- zero degradation.
Go for real-time Mpeg2 encoders. Avoid real-time Mpeg1 encoders unless you don't care abt actors' acting skills. With Mpeg1, you can hardly tell whether the characters are smiling, crying, whining, etc. Yeah, it's THAT kinda quality.
Note that professional VCDs (like original movies VCDs) are done by OFFLINE encoding of raw AVIs (uncompressed quality without any losses). Still, the professional VCDs show motion jerks and blocky artifacts, I'm sure you noticed if you watched enuf VCDs.
OFFLINE encoding is not what you want, becos you want to record without human intervention. ONLINE encoding will let your PC record TV shows PLUS encode into "small" Mpeg2 files onto your HDD, all without your intervention. OFFLINE encoding means you buy $2000 worth of HDD, record with AIW in AVIs (or any other AVI capture devices), then intervene by starting offline encoding to compress the recorded AVIs into more manageable Mpeg2s.
By the way, the $2000 estimation is way too low. Unusually large HDDs cost more per GB than common sizes like 40GB. On other hand, if you buy 20 x 40GB HDDs, you have a problem hunting for a chassis (RAID controller and such) to support that LARGE number of HDDs. The sheer amount of HDD means you're looking at a very cost-INeffective solution, giving you very UNCOMMON costs.
Last note:
I'm currently using my fastest PC (1.4Ghz T-bird) to do the recording. In time to come (1 year at most), my 1.4Ghz T-bird will become the slowest PC I own, which I will delegate as a dedicated system for PVR functions. In short, buying the AIW gives you "future proof" investment. As CPUs get faster, your AIW simply works better! Currently, I record shows on my 1.4Ghz T-bird without dropped frames at "max quality". But if I start clicking on windows here and there, the 92%CPU-usage over-revs to over 100%, and AIW starts dropping frames. With a 3Ghz Athlon, I should actually be able to record shows in "background" while typing this post to you!
A year ago, the AIW capture boards were THE WORST investments becos there wasn't any 1.4Ghz CPUs yet (or none that are affordable). Today, the AIW boards are seeing much use in faster CPUs. Like I said b4, ATI knows this, and boy are they squeezing us for it. It's a monopoly so far. In terms of real-time Mpeg2 capture quality, nothing else comes close to AIW's integration of GoMotion. Not even DC1000 (US$1200). Except that DC1000 is hardware-encoding, and doesn't rely on your CPU horsepower...
regards
jon