After ~10 years, I've brought my longest-running project to life

@tightwad If you, like me, have lots of commercial VHS tapes, your only option is convert them yourself. Otherwise, if you have tapes with family movies and stuff on them- hire someone to convert them and clean them up- they'll do a better job than you will.
If you need to convert them, figure out if you need DVDs or if you can stick with digital movies only (H264- what Blu-rays & iTunes movies/shows use, and every streaming device supports)- if you need both, that's not a problem, it's just better to know that ahead of time.
Next, figure out how much time & money you want to devote to this- my plan relies heavily on getting the best quality out of my equipment, then accepting the video quality except for a minor touchup or two.
If you're looking to do this seriously, you'll want to head over to the doom9.org forums- they are the best resource for any part of this process, from start to finish.
In any event, you'll need a minimum of 3 pieces of equipment- a capture device, a VCR, and the computer to capture on.
There are more devices you can add, but those are the bare minimum.
If you're doing the quick route like I am, here's what I do:
I've got a JVC SVHS VCR (flea market find), an AVT-8710 time base corrector, and a Hauppauge 950q hooked up to an HP 8100 Elite desktop.
I use libav's avconvert to capture the video (10 minutes longer than the length stated on the packaging) using lossless H264 with 256k AC3 audio in a .MP4 container.
VLC would also work nicely for setting up the video capture- I do my video capture on a Linux box, so I can't really offer any other capture software recommendations for Windows.
Afterwards, I open up the file with Avidemux 2.6, save the opening promos/trailers (if any) to a separate file, chop them out of the video, and chop the dead space after the credits.
Usually videos have some fuzzy lines at the bottom, so I use blacken borders to clean up that (there's probably a better way, but it works for me).
Recently, I've been deinterlacing the videos as well, and just use Yadif for that.
Then I encode this to the final video in Avidemux using x264 w/ CRF 20 and copying the audio over.
This gets you a video that's not too much worse than what was on the VHS tape at the time- you can certainly improve the quality, but that's where you can spend a lot of time.

I also make sure my movies have at least some metadata- name, picture, and description. If that's not there, I try to add it.

@dashcloud wow, very well thought out and described. Thanks!

@dashcloud I've been hoping for quite a while to start something like this. I'm thinking to go the audio route as well and buy a bunch of uses LPs to transfer. Maybe I'll start with VHS instead.
Thanks for the awesome comment!

@dashcloud do you dedicate a separate computer to this? Or are you using it for anything else during the 120 minute transfer?

@dashcloud Kudos for using a TBC! How did you keep the audio synced, though? Or did it not wind up being a problem?

@luvche21 I do dedicate a machine just to this- it takes the vast majority of the processing power of the machine to do a single video (I could limit it, but no reason to currently).

@luvche21 Audio should be a lot easier- check one of the threads here or at Woot where a USB turntable has been sold for lots of good details on equipment, setups, and processes.

@jqubed Audio sync hasn't been an issue- except for the one time I accidentally used 25 fps to record an NTSC video, and when I used to use a PVR-250 not in DVD mode.

@luvche21 Wow, that's dedication. I don't listen to music but if I did I would be jealous!

@tightwad Well, I've always listened to a lot of music, especially in the last 10 years. And I also studied music as an undergraduate (as did my wife) - so we definitely try and collect a lot of it!

The problem that I started having was that I had an album or two that I would listen to quite a bit, but then after purchasing a few more albums, I would somehow forget/lose my older favorite albums.

@Pavlov Clearly- unfortunately, stuff that didn't make it to DVD isn't terribly popular there.
Did I make any cringe-worthy errors in my description?
Also, if I was to advise other people, this is what you should do instead: Vudu's disc-to-digital program

@Pavlov If I ever get around to setting up my media center how i'd like it, sickbeard and couchpotato will likely power it.

@Pavlov I always figured that if you purchased a copy of the movie, it's not very illegal to download it.. right? I mean, even when I buy a new movie in bluray with an Untra-Violet digital copy included.. I'd still rather have a copy without DRM for my media center...

@kadagan I used to be a huge proponent (obviously, given my profession) of managed media rights (DRM, anti-piracy measures, strict intellectual property rights enforcement, etc.) . . . However, recently I have changed my position. Instead of viewing the growing prevalence of piracy as a reason to simply increase the application and restrictive nature of software anti-piracy measures, I am now a proponent of finding alternative revenue streams to produce content or making the content so available both inexpensively and abundantly that pirating it is more difficult than clicking off a micro-payment and owning it legally.