I don't know what they did.
Probably captured to lossless. I suspect a time base corrector. (Especially one build into the vcr).
So far, I've been underwhelmed by the effectiveness of TBC's though. It's early in my testing. But before I got them, I did read a lot of depressing caveats.
(If someone would freakin' finally come out with software tbc capture function, it should theoretically be able to overcome all the timing limits that hardware has).
I have a D-Vhs that does a remarkable job of de-noising. But it doesn't seem to do as much tbc-ing as I expected. Perhaps because I haven't tried home video yet. (I suspect that our local stations all used vcrs, for everything, but never bothered to use TBC with them).
Mitsubishi HD-2000U. Google that at videohelp & doom9's forums. Should get the subject going for you.