
Well, I finally heard back from tech support and it boiled down to an uninstall-reinstall scenario. Not what I wanted to hear from them, but it really did the trick! Now I can finish my project. In order to help others, I am posting the response with instructions provided. Hope it doesn't happen to anyone else, but if it does...
1)Clean up temp files in c:\windows\temp
2)Uninstall VideoStudio from Control Panel Add/Remove programs
3)Reinstall VideoStudio again
4)Upgrade your VideoStudio from 7.0 to 7.01 by installing the patch
that you can download from our website:
http://www.ulead.com/tech/vs/vs_ftp70.htm
5) Plugin the IEEE1394 DV card(PCMCIA IEEE 1394).
6) In Device Manager of Control Panel/System, 1394 Bus Controller
=>1394 Host Controller should be listed.
7) Connect the DV camcorder to the DV card, then turn on the DV
camcorder.
Be sure in Control Panel/System/Device Manager/there is an Image device
and you can open the "+" to see 'Microsoft DV Camera and VCR'(Win ME or
XP you will see your DV camcorder model).

Run VideoStudio 7 and go to the Capture step.
9) Select Format > DV then VideoStudio 7 will be able to detect your DV
device automatically.
And yes, I did disconnect and reseat the firewire card in the pci slot as a precautionary measure. The reinstall solved the problem, and it still worked after the update patch was installed.
Thanks again for your attempts at assistance sjj1805! 