The most important piece in the process in the VCR. I don't think you can buy standalone VHS decks new these days (avoid any DVD combo units), so you might have to look on eBay. For best results look for an SVHS player from Panasonic or JVC.

For a bit more cash you could get a used pro model, and maybe a Time Base Corrector (TBC) as well. This link gives more information.

For capturing VHS, any cheap capture card should be adequate. If you wanted to spend a bit more, then cards based on the ATi Theatre 650 chipsets get good comments.