I've had several troubles using the C-MEDIA sound chips in the past. The cards are often setup badly, with plugs being shared for inputs and outputs, especially on the 5.1, 4.1 and 6.1 cards. Which one of these do you have?
Regarding hiss, that can often be caused by interference from any number of items: fans in the room, the video card and sound card being too close together on the motherboard (or being too close to some other card that puts out interference). It could be the CPU fan, the case fans.
It could be the wires you are using are not insulated enough or are too long. This is why I use MONSTER cable.
I have a problem with hiss on my coax line that is fed off a 100-foot cable from a satellite box in the next room. The fix I have is to use my JVC HR-S9800U VCR and pump up the REC LEVELS about 25% (VCR volume control, very rare for most VCRs). I put my coax into my JVC first, and then out to the ATI card via s-video. I use the ATI coax input for a $5 antenna to pick up air channels. I get no hiss on that.
On the C-MEDIA card, the last on I worked with was a pain, and I ended up using the MIC input instead of the LINE-IN input. The MIC sounded better (be VERY sure to turn off any software/Windows amps on the MIC). Here's an image of what I'm talking about (ignore the fact that mine is on mute at the moment):
If you are using the internal AUX channel for your audio, be sure the audio cable is good (maybe buy a new one at a computer parts store for all of $1). If you are using the external plug, try the MIC over the LINE-IN.
I neeed more details on the exact inputs you are using, both with the video and the audio. Coax vs composite from VCR/whatever? And then internal vs external audio wiring setup?
Hopefully some of this will point you in the right direction.
It could even be that your PC audio is fine, just that the PC speakers are bad. Does this appear on the final DVD on a tv set?
Also make sure ALL unused audio is MUTED during capture (CD, LINE OUT, LINE IN, etc) ... the only ones in use will be "PLAY CONTROL", "WAVE", and then the input being used, whether it be "MIC" or "LINE IN" or "AUX"
My ATI AIW 7200 cards both use AUX internal wiring to a SOUNDBLASTER card.
Also realize some audio cards are just defective and hiss no matter the situation. This would be a last-ditch solution. Not likely, but possible.