Oh you want to throw it into Premiere and edit? Scratch DivX then for capturing, Premiere works optimally when you import unompressed material (or semi-compressed in YUV's case). For archiving your finished product using less HD space then look at using DivX.
As for the capture card it pretty much sounds like it's the culprit. The FlyVideo 2000 let's us capture at up to 720x576 and has been getting good user reviews on AVS. I actually ordered one a couple days ago from Technobazaar and it's on its way here ($40 shipped). This will be capture card #3 after being dissatisfied with an XCapture and Asus TV Tuner card.
