100% positive. Here's the proof...
I mean, it doesn't say "click here for PAL mode" or anything like that. But that's no different from NTSC capturing, although VirtualDub comes in NTSC default settings if I recall correctly.
And the PAL doesn't work in ATI CMC. That software was apparently designed for North America, but the hardware is based on a more open spec.
However, in VirtualDub, you simply have to specify PAL settings.
That is, 25fps, 720x576, PAL-I capture filter video decoder. Then that's that.
Pick your codecs, capture.
If you want MPEG captures (high bitrate), use the Matrox codecs.
If you want AVI, use HuffYUV, uncompressed YUY2 or Lagarith. (I use HuffYUV.)
The one thing I noticed on this particular computer was that the first 6 video frames were junk, but it still buffered the frames. Audio was constant from frame 0, so this caused an offset of 6 frames of audio. When I re-opened the video in VirtualDub, I set the interleaving to -400 milliseconds (6 frames converted to ms), which corrected for those 6 frames. Problem solved. I did this test a few months ago, and I don't remember any frames/audio issue that time, either..
I don't feel like connecting this to the Vista 64 system again, and the PAL VCR is not anywhere near that computer. So this was done on my XP laptop, where this card is used most of the time. But this will be the same in XP, Vista or 7 -- 32 or 64 bit.
I used a commercial PAL VHS tape of a Heathcliff cartoon, played in a JVC HR-S7965EK PAL deck.
Here's the full-sized video opened in VirtualDub after capture:
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Here's the Gspot info:
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Here's a sample clip attached below, about 1 second worth of video chopped off (6.5MB):