capture quality depends on your source.
if your source is vhs, connect using an s-video cable directly to a video graphics card that accepts s-video [such as the ati-9800].
if your source is analog [such as Hi8], a backward compatible Digital8 camcorder can be used to capture via firewire [much better than capturing using an s-video cable that will degrade the source video].
the software [scenalyzer] will not degrade your source since the output is an avi file. the advantage over a premiere capture is that you have the ‘optical scene detection feature’ to break your clips everytime the scene changes.