Help Newbie Please!

Title says it. I can build em, fix em...you name it but this has me perplexed. I have the Sony DRU-500a which comes with software called MyDVD 4.0. In the software, there is the ability to capture straight to DVD format for playback on home system. Here's the issue:

I have an ATI Radeon 9700 and am looking at adding a Video Capture system to the computer as well. Sonic recommends some pretty interesting different systems like: Adaptec VideOH! Dazzle Digital Video Creator II, and the like. Now here is my question.

Is it possible to use an ATI Radeon AIW 9700 (not on the recommended list) or another source in Mp2 or AVI and then let MyDVD convert to DVD format and burn? Am I really relegated to Sonic's list for proper video capture? All I want to do is convert my old VHS and Hi8 tapes to DVD for use in family viewing. I love the Sony burner...it works "wonders"...but the software / hardware thing reminds me of the bottomless pit...more $$$ every time I turn around. Am I better off with PCI or USB 2.0 capture hardware?

Any suggestions?

Please!!!!

Bob


System specs:

Asus P4T-E with Intel P4 2.0a
384 MB RDRAM
ATI Radeon 9700
Soundblaster Audigy Gamer
Toshiba 16X DVD ROM (D
Plextor 241040a CD-RW (E
Sony DRU 500a DVD RW (F
Windows XP Professionan NTFS