If you've got 8mm video or VHS video tapes that you want to transfer, there are a few parts to the process:
- Capturing the video through an analogue connection;
- Editing that captured material to trim the ends or making other tidying changes;
- Burning the material down to DVD.
Since you are starting out, I would suggest that you look at picking a relatively cheap bundle package then do some searches for reviews of that product to see how other people have got on with it.
You do mention Dazzle and although I haven't got any experience of the product, Pinnacle's Dazzle Digital Video Creator 150 would fit the bill in terms of functionality. It avoids the need to open up your system by using a USB 2 port for the connection, it has S-Video and composite video connections (so there is your video transfer capability) and it comes with software to allow you to manipulate the captured video & burn it to DVD.
Buy.com has that at $126 so that should fit into the price range you've suggested.
Please do not take this as an endorsement for the product, though. I've no experience of any Pinnacle products so I cannot comment on the quality or reliability. Hopefully, though, by suggesting a product that would meet your needs, you've now got something to compare against.
If you want other choices, the Video Guys have got a Getting Started
page that lists other suggestions.