If you have an encoder already (TMPGEnc, Mainconcept, Canopus, CCE, Panasonic, et al) you should already be able to capture in mpeg format.
If you must cap in avi, please use at least divx 4, divx 5 and up preferred, just for quality. There are other great codecs around, huffyuv for example, that have EXCELLENT quality, but almost no compression, which can result in huge files.
If you have a spare 120 gig NTFS drive, then no problems
