Yes, you're in for an adventure because my previous comments only scratched the surface.
Understand up front that I haven't done this much, and I basically taught myself how to do it. What I do works for me, so that's all I go on. I know there are others in this forum who do this kind of thing more often or even professionally. Hopefully they'll read this and offer better advice. But, I'll go ahead and let you know what I do.
What kind of video capture card do you have, btw, and what kind of connections does it have? The answer to some of your questions depends on that.
My hardware setup works like this: I have a standard 3 plug RCA cable coming out of my VCR or digital cable receiver, depending on what I want to capture. One plug is for video, the other two for left/right audio. This plugs into an RCA -> S-Video adapter, which I then plug into the S-Video input of my graphics card. You can get the adapter at Radio Shack or another electronics store.
You will need software to do the capturing, and no, neither Winamp or Media Player will do it. You will also need video capture drivers, which are not a standard part of Windows and are specific to your card. Any installation software you got with that card should have it, or you could probably get it from the manufacturer's website. ATI, for example, has updated WDM drivers on its website that cover all its capture cards.
I haven't found any good shareware or OSS software for Windows that does capturing well, so I use Pinnacle Studio, which came with my video card.
Yes, the capturing would take place at a 1:1 time ratio. There's not any way around that with a VHS tape.
Now, after you've captured the video, you have to render it into DVD compatible files, and this can take a LONG time. If you do the capturing with Pinnacle or another suite like Nero Vision, they have included tools that take you from the capturing stage through scene creation to DVD menu creation, to rendering, to the finished product. I personally recommend this route because it can become quite complicated trying to use several different applications to do it all in separate stages.
Here are links to a few guides I've used:
http://www.dvd-guides.com/content/view/125/59/http://www.dvd-guides.com/content/view/32/59/http://www.dvd-guides.com/content/view/53/59/Hope I haven't confused you even more.
P.S. You need to have a relatively fast machine with a decent amount of memory and ample storage space to do this at all. If you don't, the capturing process will drop frames and create a very poor DVD. For the sake of comparison, I have an AMD XP 2600+ that I overclock to 2.1 MHz when I do capturing and 1 Gig of memory with fast timings. When I capture something at high quality, 728x576 aspect ratio, I tend to drop 1 frame per 100. With a VHS tape capture, this isn't too bad, but you'll notice it. If I drop down to the next smaller aspect ratio, which I forget at the moment, I drop 0 frames.