So let me get this straight before continuing...
You have:
- GE consumer VHS VCR
- connected via composite (yellow wire) to
- Prime Image TBC
- connected via s-video to
- Panasonic DMR-ES10 DVD recorder(pass-through only, as needed)
- (and when in use) connected via s-video to
- Dazzle DVC-100
- connected via USB2 to Intel Pentium 4 2.93Ghz computer
Is that correct?
I worry about the composite/s-video crossover in the TBC. I think you're losing image quality by crossing, and relying on the Prime Image comb filtering.
A homemade line amp? Really? I'd love to hear more on this! I currently have a $100+ Tapco board between my VCR and DVD recorder (or capture card). Works well for volume, gain, and some EQ to pre-process for hiss or hum.
Software deinterlacing is still wholly inferior to what hardware inside televisions can do. A lot of broadcasted video is still 1080i, with no end in sight. It's going to be a while before it goes 1080p across the ATSC broadcast. Not to mention the understanding that cable, satellite and older formats (VHS,DVD) are all 480i. I would leave the video as-is, match the source. Once you deinterlace the video, it will never look better. Hardware, however, will improve in time, as will the video quality of your interlaced DVDs!
Never blend fields. Ewww, yuck. That makes a ghastly ghostly mess.
A 640x480 H.264 @ 3Mb/s is a decent allocation of bits, and at a size that will well more than retain all the quality found on the source tapes. It's also a standardized 4:3 video size. It won't play in anything right now, but a computer hooked up to a TV will be fine. Then again, to play an interlaced version of these files, you won't have access to the hardware deinterlacer in the TV, you'll be relying on the one in the software (on-the-fly, such as in VLC). But then again, quality of deinterlace will improve in time, on the on-the-fly software playback methods. I've witnessed this for quite a while.
I suggest against DVD-R DL for any reason. I suggest against DVD+R DL for "archival" needs. The second layer's longevity is still suspect. I author and create DVD+R DL discs, too, but I archive the source files to single-layer DVDs and/or hard drives. I don't trust the second layer, even on Verbatim, for "long term archival" storage.
Creating Blu-ray is something I'm not yet into. You'd want to check the specs, to see if 640x480 is allowed
(I doubt it is, but could be wrong). And then BD-on-DVD is not necessarily supported
(to my knowledge, but again, I could be wrong) by the Blu-ray disc specs. I have TMPGEnc Authoring Works 4, which does MPEG-2 BD authoring, as well as Premiere+Encore CS3 and CS4, which should do MPEG-2 and AVCHD/H.264 both. I can read the docs, but I'm sure same info is available on the pegasys-inc.com and adobe.com sites, if you want to seek out that info yourself.
Hopefully some of this has help you out.