Video creation/editing - What do I need?

Let me explain simply what I want to do, then please tell me what I need to make it happen...I want to hook up a VCR to my computer, record the video to my HD, take the recorded file and burn to a CDR (VCD format) that I can play on my DVD player.I have tried the following...I have a PII-400 with an ATI Rage 128 Pro capture card I use to capture video. It's supposed to capture the MPEG needed to make VCD. I then use Adaptec Easy Video CD Creator to burn my disc. When I play it back in my DVDplayer, I see garbled digital blocks and hissing static. What type of equipment do I need to do this right? Is my processor not strong enough? Do I need a better capture card? I simply want to start archiving old VHS tapes onto VCD where I can make chapters and other improvements. Standard video capture programs and hardware always make these little windows that playback good and when you switch to full screen, forget it! I at least want the same VHS quality I started with. The next PC I buy, Iwant to be able to have all the muscle under the hood to do this simple task. What keys should I look for?