I had this issue last year when i wanted to convert my best friend's step-sister's son's wedding video from video to dvd. Actually, it came from super 8 which we transferred to video. Problem was it also had to be converted from PAL to NTSC too.
Anyway, once in video we up-sampled the VHS with a USB video "dongle". A dongle is like a little computer in the plug. You can buy a dongle on amazon.com.
Connect your VCR to the cable dongle and then plug the dongle into your PCMCIA slot of your computer. If you don't have a PCMCIA slot, then get a dongle-to-PCMCIA cross-over adaptor from buy.com.
Then push play on your VCR and ctrl-alt-delete on your PC. When the task manager comes up, click shut down. After your PC reboots (this installs the dongle drivers), then just bring up Windows Media Player and hit record.
This will create a file on your desktop that contains your VCR tape!
Viola!