S-VHS Can Make a Big Difference
You should definitely capture over firewire. I've tried bunches of USB adapters and they compress the video to MPEG on capture in most cases. MPEG is alright for delivery, but encoding in realtime at the consumer level is shoddy at best.
Using a VCR that supports S-VHS and has SVideo output will drastically improve your digital conversion. SVideo separates your Luminance and Chroma channels to effectively double the bandwidth for your Video signal.
The ADVC110 is nice, but if you're looking for the best bang for buck, the ADVC300 includes line timebase correction that I've found makes your VHS material look much better on big screen TVs. The ADVC300 also holds it's value well when sold used, so you can pick one up, use it for your capture job, then sell it on ebay for $50.00 less.