It depends waht you want to do with the captured files. Uncompressed capcures will create huge files, but if you want to convert them to divx or xvid it's the best option. I personaly directly use xvid codec (the best picture with the lowest file size IMHO).
 
BTW if you use very high resolutions uncompressed data stream will be higher than what your hdd can handle.

well I will be taking this video and making dvd-r's of all of the home movies wevev taken with the camcorder.. I have a 7200 ata-100 HD and it doesnt drop frames if I use mpeg2 at 720x480 or uncompressed YUV2 avi at 720x480.

a 640x480 capture of analog video is typically fine. thats more than a normal tape has and more than a normal tv will show. when u capture or output at a larger res it's adding lines anyway, so u either add lines during capture or during coding for a analog tape. for this card i dont think it makes a difference either way.
 
i would like to experiment with the higher res's but i dont have an edtv or hdtv to play with.
 
*trivia note: the new divx codec will allow progressive compression (for edtv) and a few of the newest dvd players are reading divx.

If you wish to capture uncompressed use the huffyuv codec. it is a lossless codec, and I often get a 3:1 compression. Major MAJOR filesize difference.
Capping right to mpeg2 is fine, unless you wich to edit the video afterwards, like adding effects. also cutting/joining already made mpeg is not alot of fun.
 
Womble mpeg2vcr people say cuts and joins mpeg2 files without reencoding very well. ive not tried it yet. I have been using huffyuv. (352,480 capture)
prepare the video in avisynth, and finally encode.