Someone I know is doing this exact same thing at the moment.
He is simply playing the VHS into his DVD Recorder. I was quite impressed when I saw the results, even when some of the footage was from 8mm before it got on VHS. You don't get any fancy menus but it seems a really easy way to do it.
I think part of it is using a really good VHS deck to play the video back on, I would say this one is playing out in RGB as the picture looks pretty good on the TV too (for VHS!).
I have tried playing VHS into a PC before, editing it and then output to DVD and found it took ages and the results were not as good as the solution I suggest above.
Cheers
Cris.