To add my bit to the spaghetti,

, the cross-thread cited by Steve and which you quoted about capturing with WMM, is not strictly relevant to your case -- I think, but see my last para below. AFAIK, WMM will only capture in DV format if the source is digital. Your VCR is of course analogue so unless the Connexant device is hard wired to convert an incoming analogue signal into a digital signal on the fly, WMM will only be able to capture in WMV format. And WMV can of course be a problematic format for VS to edit and output to.

But again, see my last para below.
You would, of course, have received the DV message if your VCR was connected to your Sony camera as a passthrough, but as you say, the Sony is not rated for that. Pity. I also have a Sony (DCR-TRV480E) which I bought specifically for its capacity to playback my 8mm analogue tapes (and Hi8) over firewire as a digital DV signal. But it also acts as a passthrough device. Unfortunately, only a small number of Sony's Digital 8 collection seem to do this.
***EDIT***:Anyway, I have now looked up the Conexant Falcon chipset capture device. I think you have the Falcon 2 chipset from the code you gave in one of your earlier posts in this thread. If so, it is most definitely hard wired to be able to capture full D1 size and quality DVD-compatible mpeg-2. To quote from the website:
"The MCE2005 certified PG600 Falcon2 features:
DVD Quality MPEG2 Recorder:
Real-time MPEG2 hardware compression as Full D1 DVD quality
Capture video from TV cable/antenna, Camcorder, DVD player, and Digital TV set-top box
Digital video recording in DVD, SVCD, VCD, MPEG2, and MPEG1 format
High quality video encode (from 1 Mbits/sec to 15 Mbits/sec)".
So I am surprised that you don't appear to be able to set it to capture in this format. Have you tried to change the format manually by going into VS Tools > Change Capture Plug-In to mpeg? If not, try that and then try a capture.
To quote further from the website of the Taiwanese company that released the Conexant card: "With this product, you can Watch Live TV and Record TV to Microsoft® Windows ® XP Media Center Edition 2005 (MCE2005) You may also turn your Home Video into DVD, SVCD, VCD, MPEG 2, and MPEG 1 files. You may watch & record the TV programs wherever you are simply by using our ... remote control."
The site includes a photo of the card beside an MCE screen, so obviously there is a setting within MCE itself which allows it to capture in mpeg-2. Unfortunately, I don't use MCE so cannot offer any advice on what you might need to use, activate or tweak to do this.
***FURTHER EDIT***: You might also want to look at this thread as it mentions another format recorded by MCE and which is compatible with VS10+. As I said, I am not familiar with MCE, but this sounds as though it might potentially be very helpful to you. Indeed, you might want to contact the original poster of that thread for advice on how to capture in that format:
http://phpbb.ulead.com.tw/EN/viewtopic. ... 0716#70716