I struggled with Dazzle without success for some time before coming to the conclusion that in life you generally get what you pay for. I eventually gave up the struggle and bought a Pinnacle DC10 video card which cost about £100. This came with Pinnacle Studio 8 software. After some fiddling with BIOS settings and downloading software and graphic card upgrades it works perfectly. I can now edit my Sony Hi8 videos onto S-VHS or VHS cassettes without problems.
If you manage to get Dazzle working please keep it secret - I really don't want to know that I need not have spent 100 quid on Pinnacle DC10 etc.