Ok. I would first try to disable your antivirus, it may take some CPU and HDD times for ocasionnal check and cause frame drop.
Did you install the VIA 4in1 drivers? If not, then install them. And disable the antivirus too. Then I would capture to the fastest drive, and I guess that it is the C drive. I would first try to defragment it to make sure that there is enough continuous space on the drive.
As for upgrading, the CPU is a bit weak, but it should be sufficient to transfer DV. It is hard to say what upgrade road is best for you, as your system is weak compared to today standard. I can see that you are not a big gamer by your videocard, so you dont need a gaming System. I built my system for editing and capturing, but at an hobby level. AMD64 3000+ socket 754, Soltek k8an2e-gr, 2x 160 gigs seagate SATA HDD in RAID0 configuration and 1 gigs of RAM. I capture with an ATI All In Wonder 9600XT (analog capture as nobody around me has digital videocam). Everything is fast and smooth. this board doesnt have onboard Firewire, but you already have a card.
I would first try with the solution I give you. And if it is still dropping frame, then it is up to yo to decide if putting a faster CPU on this board worth it. Because that what I'll do first, as 512 megs ram should do well.
I have already captured analog video with my old 1700+ with 512 megs RAM and my AIW 8500DV and if I was doing something else, it would drop frame. but remember, it was analog capture so it has to be compressed to mpeg2 and then saved.
-Always put the blame on you first, then on the hardware !!!