You need a graphics card or TV card that will allow an analogue signal. Most of the ATI All in Wonder cards have the ports you need built in. Personally I have a little dongle thing that attaches into the S-Video port of my G4 Ti4600.
You will need a half decent video editing program. I use Videostudio 6 at the moment, which is really easy to use and has pretty good MPEG1+2 codecs.
At the moment I use a analogue cable running from the Video port on the VHS to the computer and I can get a good signal in that way. I have the two audio L/R ports hooked up to my Line In port on my soundcard.
Being a British video it may not have these ports, but you should be able to find a SCART cable that will allow you to plug into a graphics card.
It's actually really easy to do, just takes some explaining. If you need any further help, then please feel free to email me.