I second that recommendation. Email the guy that runs the site and you'll find very reasonable rates for VHS>DVD conversion done with great hardware. He did some tapes for me that I was having trouble with and followed my specs closely. It took a little while but for the price I didn't argue. Ironically enough, I upgraded both tapes in the meantime so I shouldn't have gone to the trouble! You will most likely need to do the authoring yourself to stay within your budget but I bet there are some people here who can help you with that for free.

PS - ask for LPCM audio (uncompressed).