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It's definitely worth installing a FireWire card, if you want to edit in Premiere Elements, Bill. The good news is that you can get an OHCI compliant FireWire card and cable for as low as $10 on Amazon.
If you're not determined to edit with Premiere Elements and you just want to turn VHS into DVDs, there are cheap devices that can do it. But, again, don't try to put Premiere Elements in the middle. Just use the software that comes with it.
The Plextor ConvertX is an example.
Here's a capture utility that will capture to DV-AVI or any other VFW codec you may have installed. It may work with your Diamond capture device. I have a Personal Video Recorder PCI card that is recognized by Stoik Capturer. While I can only select the 640x240 resolution, the capture of my VHS tapes comes out amazingly well in DV-AVI 720x480. I'm still experimenting with it, and it does sometimes cause Windows Explorer to reset when you open the folder where the temporary files are saved. I still haven't figured out if it's some Explorer shell extension I have installed that is causing the crash. I have to drop to a command prompt and delete the corrupt files in DOS instead of from an Explorer window. What do you want for free?
A word of caution about capturing to a temporary file first in order to avoid dropped frames, the temporary file will become huge, so you need lots of free defragmented hard drive space.
I just discovered something even better than Stoik Capturer, and it's been right under my noise. It's VirtualDub under the File > Capture AVI menu item. With VirtualDub I can capture from my PVR card direct to DV-AVI at 720x480. And the fields are interlaced correctly in my case.
There are quite a number of menu items to go through to make sure everything is set up correctly. Under the Video > Compression menu item you select a DV-Video codec. I picked the Mainconcept DV Codec 2.0.4. I don't know where that came from, but if it wasn't there I could have probably used the free Panasonic DV codec.
So that may be an option if your Diamond card is listed as a menu item under the Devices menu, after going File > Capture AVI.
I need to continue from my last post. I found that I needed to use Donald Graft's "Reverse Field Dominace" filter for VirutalDub when I was capturing from my VHS tape recorder.
Most capture cards use top field first, but DV-AVI is bottom field first, so there is a mismatch when capturing. By adding the RFD filter during capture, the DV-AVI file comes out correctly. At first it didn't seem that I needed that filter, but further along in the video I started seeing tell-tale signs that field dominance was reversed.
In VirtualDub in the Capture AVI mode, there is a Filters menu item under the Video menu where you can add the RFD filter.
Since I had captured a whole hour of tape without using that filter, I had to fix it. I was able to process the "bad" DV-AVI in VirtualDub in regular mode and use the RFD filter to fix it. That way I didn't have to capture from the tape again.
Here is some great reading about converting VHS tapes, my first post over four years ago. Many of the same people are still here helping folks, and the solution is still pretty much the same