I have a Canon XHA1 and I use Premier Pro CS3 and connect via firewire. I am not super exited about the quality of the mpeg2 files that it delivers by default. I would like a higher quality capture but I am not sure what my options are. Spending more money is an option at this point if I have to purchase more software. Any suggestions?

All captures by firewire are digital in nature.

The exact digital data as recorded by the camera, except for dropouts, are what is captured by your computer.

If you are not happy with the quality of your images, then it is most likely not a capture problem, unless you are getting dropouts.