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You'll need a compression tool. You want to transfer the video to VCD, SVCD, XVID, DIVX.........

The trick is to get the VHS tapes info to your computer. I have a Sony Video Camera that has a firewire connection and can transfer video to the computer. Takes up a lot of HD space initially but when you convert to MPEG VCD format the files shrink considerably. If the file is too large you can chop it up and put it on multiple CDs.

I prefer VCD as most new DVD players (home entertainment system) will play the VCD format (as well as MP3......). I have heard of newer DVD players that will play the SVCD format but havent looked into it that much.

Link you should browse through. Should answer a lot of your questions.
Look at the capture link. It may tell you how to transfer from VHS to computer.
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