I'll give you my opinion, and others may have some as well.

strictly speaking, an analog capture can't be better than the original or the file conversion. By definition, you would be taking the mpeg file on the disk, converting it to analog, then converting it back to digital. the resuling file almost cannot be the same as the mpeg because you've taken it through 2 A/D processes.

that said, practically speaking, it may be just as good, or, call it more suitable (if not 'better'). Examples of this could include noise reduction, hardware color correction, etc. things that could be done in the D/A/D processes that would clean up your video (all things that could be done with software too, on the file). Sometimes, though, it's just easier to do them in hardware when you are capturing or converting the file, and you'd be hard pressed to actually see any differences between the analog captured file and the converted file, esp. with SD material.

The other thing to consider would be the source of the original material vs. your intended display. If there's a big difference in resolution (e.g. VHS was somewhere in the mix in the original and you are using a HD monitor for display, just to make the difference extreme, 240 lines vs. 1080), you'd probably want to keep as close to the source of the material as possible (and potentially not do D/A/D etc conversions). If the two are more similar, such as DV for the original and a SD display, for example, you've got a little more wiggle room available to make changes without them being obvious in a practical way.

All of this is assuming that the best you have is the mpeg (compressed) files of the original and that using that in your project is acceptable (which it seems to be, given your current undertaking).

If you have any more specifics for your project re the above feel free to post or perhaps the above is close to what you were looking for. Enjoy!

Another vote for VirtualDub with a note: not the original VDub, but it's MPEG version (VirtualDub-MPEG2). In addition to decompressing, it will do clean-up as well, all at once.

The codec to use is Microsoft Video 1 as this is the native codec used by Windows-based computers for DV editing.

Also, before running VDub, you can use MPEG Streamclip to fix broken timecode or select a specific audio stream (in case you have multiple audio streams).

As they say, "the best things in life are free"... both of these programs are free.

thanks again for all your responses.