VCDHelp is the bible.
Most stand alone DVD players will not play SVCD or xVCD at a bitrate more than 2520kbps (with 220kbps audio, total 2740). A lot won't even play that but that is the standard max.
TMPGEnc. Use it's templates. Load the "unlock" template (in Extras directory of templates) to gain access to any of the options that TMPGEnc locks out when using a standard template, however it's almost always right.
In TMPEG Video settings tab use Motion search precision "Highest Quality (slowest)".
Crap in, crap out. The grainy artifacts of a handicam are hell for SVCD compression. Lots of blocking on fast moving objects. Typically it's better to compress VHS handicam videos at xVCD 2520kbps, ie. less resolution but more bits per frame. To make an xVCD in Tmpgenc just use the wizard to create a VCD then load the Unlock template and change the bitrate of the video up to a maximum of 2520kbps.
Audio sync is extreamly difficult. Best results I've had with my Winfast TV2000 XP capture card and MAudio Audiophile audiocard are to use iuVCR capture software, Huffyuv 2.1.1 lossless video compression. If I stick with the default sizes my card captures I never drop frames, if I try to resize from a default size (ie. capture direct to SVCD sized for example) the card cannot keep up. I capture at 640x480, 25 fps (PAL). In the iuVCR options tab select "Sync using stream offset" checkbox, "Audio sync offset" checkbox", set the drop-down to "auto" and click "short audio samples". I do not use the system timer for audio or video.
If I am capturing with the intention of replacing the audio for the video I tick Master Stream "Video" in iuVCR options. If I want the existing VHS audio to stay in sync, I use "Audio".
If you're dropping a lot of frames during capture try only capturing at the cards default capture sizes, defrag the destination harddisk. My harddisk has hardware cache and this helps a lot. If you need, get a new (7200rpm+) drive.
If I start recording in static or plain black the audio is always out of sync. I must start recording with recorded video (the copyright warning on a pre-recorded VHS is enough). I must also stop the video before the VHS reaches static again or the sync will go out. If I'm replacing the audio later, none of this matters.
I set iuVCR to use the Leadtek YUY2 DeInterlace filter in the Filters tab.
Slashdot discussion on VHS to PC conversion
Arstechnica, "Guide to Capturing, Cleaning & Compressing Video"