WinTV was a great program ... until WinTV7. Version 7 is just awful, and has many complaints from users online, myself included. I tested some of the Hauppauge USB PVR cards late last year, and it was just a horrible experience. The Hauppauge UK forums have many complaints, too. My problem was that it was both choppy with HD channel tuning, and unstable crash-happy software. It's good that you found something else to work with.
I've not used Windows Live Movie Gallery, and I don't expect much from built-in MS tools. But it's good to hear you found it acceptable and easy to use.
Those consumer-grade H.264 apps are generally pretty lousy for quality. Granted, that may not matter on a little bitty iPhone, but it will be annoying on a big computer monitor or TV. The best H.264 video encoder is the MainConcept
encoder, found either as the expensive standalone MainConcept
Reference, or as part of another program (like Adobe Premiere or Vegas Video). The next-best choice is the freeware/open-source x264 encoder, using one of the free GUIs like StaxRip
Aside from that, it seems like you have a good method going, and that's always great to hear.