I have used Pinnacle Studio versions 9 & 10, ULead Video Studio versions 6, 8 & 9 and Adobe Premiere Elements versions 2 & 3. Both versions of Pinnacle Studio crashed constantly and version 10 was very slow, even on my current build. Basically, even though I got both versions for free after rebate I think I may have paid too much.
(I still had to pay postage)
ULead was easy to use and I would have recommended it had I not tried Adobe Premiere Elements. Adobe is easy to use, has only crashed on me once (and I figured out I was working on a file that had issues, because it crashed anything else I tried to use to edit it) and is very quick to work with (as compared to the other video editing programs). So, I would highly recommend the Adobe program.
As to how the program captures the video, depends on your source. If you are using a DV or mini DV tape digital camcorder then the video program itself will capture it (in DVI format ... my understanding of the DVD or hard drive based camcorders is that it will import as an mpeg video, but I am unsure if a video editing program can import it or if you have to use a program from the camcorder manufacturer do so). If your source is analog, i.e. analog camcorder, VHS tape, etc., then you will use whatever video capture device you have in your computer (VIVO capable video card, TV Card such as an ATI TV Wonder, ect.) to capture the video and simply import the mpegs into the video editing software.