Best way to convert VHS to MPEG4 digital?

This is an option, but I don't know if it supports audio capture from the source. Also appears to be only for Windows.

http://www.roxio.com/enu/products/easy-vhs-to-dvd/standard/overview.html

This one has stereo inputs, so I would assume stereo capture: http://www.amazon.com/dp/B0029U2YSA

I have a Canopus ADVC-100 that would work flawlessly for that kind of thing, but it's rather expensive.

Some DV cameras have a passthrough feature; check your camera for a "video in" composite input?

I know you specified MPEG4, but if this is for archival purposes perhaps you could get one of those VHS+DVD recorder combos and copy your VHS directly to a DVD?

If all else fails, if you contact a nearby university I'm sure they would have the resources in their video production department for cheap or free.

I would recommend converting your VHS to DVD, because this give you a higher quality video that you can then re-edit and re-use. Don't put more than one hour of video on a DVD, as this will significantly degrade the quality. I would recommend having it sent to a service that does this, such as Got Memories. They have all of the right equipment to do the transfer.

VHS is very low quality by todays standards. Rated for ~230 interlaced lines resolution it'll look like crap when played back on a modern display. That said your best option might be a VHS to USB (VHS2PC) player like ION makes, these things can often be found on clearance at the local WalMart or Radio Shack. Might only be PC though so check first.

No matter what hardware you choose to do the capture you're likely going to have to buy some hardware. The VHS2PC is a capture device, once you're done I guess you can put it on eBay.

Once your video is captured (most likely MPEG-1) you can convert it to H.264 with Handbrake BUT be warned that modern video compressors such as H.264 use many reference frames and other tricks to reduce the file size significantly. Your old, noisy and poorly tracked (no timebase correction) will be a difficult compress and the file may wind up larger than the source material and look worse to boot.