I am just going through this very exercise. Having a stack of VHS tapes taking up valuable space is a luxury we can no longer afford (or so my wife tells me).
The best way would be to use an SVHS machine because it will output an s-video signal which would give you the best quality input for the DVD. However, I've just used my old Akai hi-fi VHS machine and used its composite video outputs. I've got a Panasonic HDD/DVD recorder and its been working just fine. I can record either direct to the DVD or the hard drive and edit as required before making the DVD.
You can get "video stabilisers" which will sharpen up a VHS image and add some degree of TBC but, to be honest, getting one of those just seems like a lot of faff
Paul