Mpeg-2 from SVHS Camcorder Quality - Newbie

I recently bought an ATI TV Wonder USB 2.0
to capture video from my Super VHS Camcorder

The playback from the camcorder is actually, surprisingly for me, of decent
quality so I wasn't planning to buy a new Digital Camcorder. However, when I
capture the video, I get fairly noticeable distortions on scenes with
movement.

I don't really understand some of the recording settings, so if anyone can
help make suggestions to improve quality, it would be greatly appreciated!

Computer Specs:
* P4 930 Dual Core, 2GB RAM, 250 GB HD 7200rpm SATA
* ATI TV Wonder USB 2.0 capture card
* SVideo input from SVHS Camcorder

Current Settings (using ATI's Multimedia Center 9.0
* record in MPEG-2 format, resolution 720x480
* 4 P frames in Group, 2 B frames in group
* encode interlace
* variable bit rate, max 20 MBits/s, target 6MBits/s
* motion estimation quality 100
* VideoSOAP - light

Thoughts?

Thank you,
Raymond

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email:

Ray