Jon, the process is: Capture. Edit/splice etc. Convert to MPEG2 Author the DVD Burn DVD I've not used the Pinnacle package buy John B will be able to advise on that. Myself I used WinDV (freeware) to do the capture, VirtualDub (freeware) to do the splicing and editing. TMPGEnc to do...
Capture cards will produce a file which then needs to be encoded into MPEG2. If you're looking for a way of converting as you capture then I think you're going to be disappointed.