What do you use to edit? Windows Movie Maker? 'Cause if you do, you can capture straight to .wmv and not have to convert anything.
I use MAGIX Movie Edit Pro 11 plus, which I've been using for years and know it quite well - it isn't too difficult to use and it can do a whole load more than movie maker eg. time-stretch audio re-sampling etc, variable speed plus I can edit on up to 16 audio/video tracks for complex titles and effects.
For some reason my video capture card does not like movie maker, and so I can't use it to capture - I have to use the bundled software, which although captures in MPEG2, doesn't seem to be compatible with MAGIX. I have to convert from one form of MPEG2 to a compatible form of MPEG2. It makes no sense I know, but at the moment it is a working system (granted with a few visual creases to iron out) so I daren't mess with it too much because it might decide to not work at all - it's done that before lol. I don't pretend to be very technical about this kind of stuff, but as the saying goes....'If it aint broke....etc'

@DEEZ, thanks, I think you posted just before me

I hope the above will answer your question

And I'm sorry that you featured as my chosen enemy lol, honestly that's just the way it worked out - I didn't have much to do with it

(If you believe that, you'll believe anything

)