I have to disagree very much with Shane.
Whenever you digitize an analog signal, try to do it with the higher possible quality without regard of the picture quality. An analog signal is the same whenever comes from a humble VHD or a DigiBeta tape.
In fact there are more reasons to avoid further compression with stuff that has been previously compressed. VHS stuff has already suffered a lot (Color Under); Going DV will kill most of the remaining quality. A good quality capturing will allows to improve the picture on postproduction.
That's what I think: The weakest the source, the most care deserves.
Personally I would go Prores/Prores HQ.
The Analog Composite signal coming from a VHS player is exactly the same than the composite signal you get from any other device (DigiBeta, 1"C, Betacam,..): 1Volt peak to peak and the band-with corresponding to the TV standard.
What you get in the VIDEO OUT socket, is not any more VHS or DigiBeta, is a VBS (Video Base Signal).
Why to capture the same signal in two different fashions?
The picture quality may be different, but that is other issue.
[Joe Paolo]" If I plug a consumer camera into a D5 deck I will have a pristine digital recording, but will it look good?"
Whatever the signal, will look better if you record on a D5 than if you record on a DV desk. That's for sure.
VHS is a low quality standard, but at least don't have any "Blockiness". If you like the DV look on top, go DV.