What you want to do is buy a better digital8 camcorder like the Sony TRV-330. It's a dead format but Ebay is your friend. Won't cost that much. The better Sony digital8s could play hi8 and 8mm, converting to digital on the fly.

You can then capture the video to your computer in DV format using firewire.

Really, any means of capturing hi8 video is fine since the video itself isn't super clear. It's better than VHS though.

The firewire connection on my digital8 camcorder has recently given out. I don't know what to do, as I used it all the time (8mm tape being cheaper than DV). Have to get a new digital8 I guess. If anyone has one they're not using ... =)