Usually cheap capturing devices doesn’t have good picture quality. I saw once such a device - it captured 25 fps video with only 256 colors or low resolution.
If you want a cheap solution then an ATI All-in-wonder could be a choice. This card is a combination of a video card, tv-tuner and a capture device. It also has video-in, video-out and MPEG1 and 2 onboard hardware codec. And it comes with software too which is highly configurable.
Some time ago I captured with an All-in-wonder a footage from a professional video camera. The result was beyond my expectations: it’s hard to tell which video comes from the original and which is from the capture (well, not so hard, but it’s very close).