I know keeping the DV is the "best" solution, but I just don't think that will work. Outside of these VHS tapes, I doubt anyone in my family will ever have a use for magnetic tape or own a magnetic tape reader again -- so saving everyting to DV tapes is out. Likewise, managing the DV files on the computer is going to be just too unwieldly. I've already got over 400 Gigs of DV files and I'm only 10% or 15% of the way through the stack of tapes. Managing an evenutal 4 terrabytes of files and distributing them to family memebers is just too much.
These old home movies are far from broadcast quality anyway, so I figure if I do one lossy compression step now (and avoid re-encoding the files in the future) the quality loss should be minimal (at least to our undiscerning eyes). I'm looking for that "good enough" solution where the file size ends up being maybe 10 MB/min and in a format that's easy to get working on everybody's computers.
OK I've changed my mind. As you've said, these aren't the greatest quality in the first place.... you're already upconverting it scanline wise when you captured the video.
I'd go for H.264 then. It's a universally adopted format that is supported by MS, Apple, as well as BluRay and HD-DVD, in some form.
You can drop down to 640x480 resolution since unless you're cplaying these tapes from a professional deck, you're only getting 240-400 lines of resolution anyway.
( I'd suggest 480x480 nonsquare pixels here, but I have this weird feeling this will be a pain in the arse in the future )
If you verify your input real scanlines, you could even probably drop this down to 480x360 with no real loss.
You'd have to ask an expert what H.264 profile you should use here, I would assume baseline is just fine. You can have a high bitrate here and still lower your storage size dramatically.
the only thing of course is that encoding time will take a virtual eternity.
I would recommend looking for a solution that lets you run batch encodes because with the size of library you're taking about, I would imagine encoding would literally take months on a single machine.
Good luck!
Another thought, since you are talking about distributing it to family members is to convert this all to MPEG2 and make DVDs of it all. I know that sounds like overkill, but since everything is organized by tape anyway it would keep your resulting library simple.
And if you use a Dual layer disc you can have very nice high bitrates