I have a big hard disk so I usually capture at full resolution with Studio 7, although you can capture at preview quality first. I usualy let it figure out the scene changes itself.
The last one I captured at preview, then wrote it out to VCR with my DC10plus (another pinnacle product).

My system is a AMD 1.2TB, 512M ram firewire capture, Canon ZR20. Never had any problems like stuttering etc.