My apologies to both of you. I hadn't noticed the change of roles and thought I was still talking to Vurbal about the current capture facilities and 4wd about the scope for the Sony HandyCam 
.
-Happy Expat
It's an understandable mistake since 4wd is giving you the same technical advice I would have if I hadn't forgotten some of the things he has mentioned.
BTW Vurbal, I have noticed your aversion to, Sony ---- Their appalling treatment of GEOHOT and the independent developer community in general?
That's part of it, or perhaps I should say it's a symptom. I find their treatment of consumers, going back to Sony Music's audio CD rootkit, extremely offensive. Having said that, the best solution for your capture needs is likely to involve Sony hardware, and conveniently it would almost certainly be used so even I wouldn't hesitate to recommend it.
Rather than focusing on what you've done already it may be more helpful to take a fresh look on your options now that I'm taking something of a fresh look at things. In part that's because I think it may be helpful to arm you with a little more information about your source format, but also because 4wd's posts have jarred some things loose in recesses of my memory.
Let's start with your Hi8 tapes. I initially thought it would be more useful to skip this part but that was probably a mistake. Feel free to ignore this if you're already familiar with the technical specs.
Hi8 is really just a prosumer version of Sony's high end (analog) tape format called Betacam. Actually that's true of every Sony analog tape format. Video8 is more or less the same as Betamax and quality-wise roughly equivalent to VHS. Hi8 is roughly equivalent to S-VHS (Super VHS) which is why (here in the US) it became the defacto standard for local news reporting. Eventually higher end Hi8 equipment also added support for stereo digital audio, similar to audio CDs but with slightly lower quality. This may have been primarily in Hi8 studio decks rather than the actual camcorders. To be honest I'm not exactly clear on that point.
Digital8 is Sony's implementation of miniDV, just using a different tape format to enable backwards compatibility with Hi8 media. As 4wd mentioned, the simplest way to capture Hi8 tapes is using the built-in conversion feature on a Digital8 camcorder. You do have to be a little careful since I seem to recall not every Digital8 camera included support for reading Hi8. I'm guessing this is limited to first generation units but that really is just a guess.
Once the file is encoded and transferred via firewire you will have either a Type 1 or Type 2 DV file. This is entirely dependent on the camcorder since all you're doing is copying the original file stream and packaging it as an AVI file. There's a lot more you will want to know about working with DV if you get to that point but there's no point in covering it unless/until you get to that point.
Assuming that's not an option, my first recommendation for analog capture would actually be an external Canopus DV converter. The video quality would be nearly as good and the capture process nearly as simple. Unfortunately it's likely to cost as much as a used Digital8 camera. Back in the day the ADVC-300 was their best consumer converter but I know they stopped making them some years back. After that was the ADVC-100 which was replaced at some point by the ADVC-110. Canopus, which is now Grass Valley, stopped making consumer DV converters entirely at some point IIRC.
If you can find a used DVD recorder that has analog inputs rather than being limited to capturing from a built-in VHS deck that would probably be the next best option for quality and simplicity at a reasonable price. You would also want to make sure it offered S-Video input and not just Composite because otherwise you would lose most of the quality advantages of Hi8.
The discussion about EzyCap's apparent resolution limit reminded me of some analysis I read a few years back about USB capture devices in general. Now that you guys mention it I believe that's standard, if not universal, for USB capture. As you've noticed already you're getting dropped frames even at that resolution. That's the USB transfer limitation I was talking about. If you could directly access the Phillips video chip's output - and you probably can't - you would get full D1 (720x576) resolution but almost certainly with a significantly higher frame drop rate.
Back when I first got into analog capture I was lucky enough to have a Sony multimedia PC (yeah I see the irony) which came with one of their proprietary capture cards. Their cards actually used a MPEG-2 hardware encoder developed for Japanese market DVRs. You could probably find one of the cards for sale but I've never found solid evidence they will work on a non-Sony PC. Unless somebody has repackaged it themselves, the driver is installed as part of the GigaPocket software which came with it. In fact back when I was using mine there wasn't any other capture software which even recognized it. That was quite a few years ago so things may have changed.
