On/Off, I have been doing exactly this for a while. Years ago (Windows 98), I used an ATI TV Card to connect a VCR. Their software at the time collected the video and allowed you to view it, but that was about it. I was using ROXIO and NERO to do the rest.
A few years ago (2003), I bought my first DVD recorder, made by lite-one. (If your wondering - PC upgrades and Windows XP required me to change my Video Card and lost my ATI TV Card). I tried a few VHS tapes, connection the Red, White, and Yellow, to the input of this device. It has done a very nice job, every putting in book-marks (chapters) to skip with-in the disk. I even converted many of my father-in-laws VHS tapes using this method, but there was a problem: Time and quality. As you increase the time to record (1Hr, 2Hrs, etc) the less quality you get. They came out nice, but they could have been better. It had a basic menu, so I reprocessed them though other DVD software to remove the Menu, allowing it to play when you insert the disk into the DVD player. I also tried to make a comeback with a TV Card via the USB port, but my PC was not powerful enough to use and had to send it back.
In December, I found something interesting. Woot.com (one day auction) was selling a VCR player (ION VCR2PC) that hooks up to your PC via USB. For the price, I gave it a try and was amazed by what the software additional did. After the video file was on the harddrive, the software has the capabilities to edit, removing unwanted video parts from the file. Additional functionality before burning allows you to edit the title Menu, changing backgrounds (Better then the DVD recorder - About the same as NERO). The final step was to click on the BURN option, insert the DVD-R and click OK. The process began to transcode and burn (About a hour for me - when I get money, I can get a faster computer). When completed, it even asked if you wanted another copy. Installation and usage was fairly easy. I set the capture to the highest quality to get better DVD results (Warning that it could move you into the more expensive dual-layer disk when complete, but you can change the quality and capture the tape again).
While I am using my own family VHS Tapes, I doubt that it would work with a copyrighted VHS tape. Sorry, do not own any to try.