I used Hauppauge HVR-1950 External capture device and converted my Hi-8 tapes to MPEG files and burned them on CD/DVD. Windows Movie Maker or ULead DVD Movie Factory, came in handy for editing. Its a slow process.
Hi-8 (or VCR) ---> HVR 1950 ---> Computer Hard Disk ---> Edit ---> DVD/VCD
Hope this helps.
I used an Easycap USB to capature my Video8 tapes to the hard drive. It is extremely cheap (about $5) and works well. It is not professional grade by any means but will get the job done.
Mine came with ULead capture software that has plenty of options for file types to save to. I generaly saved to MPEG2. Once the files were saved I would use Sony Vegas for editing.
Before the EasyCap I had been using a older Pinacle Movie Studio that was quite expensive when it first came out. I switched because it was not compatible with Vista. Between the two I did not see any differene in video quality.