I have a DV camcorder that accepts analog inputs and connects to the computer using Firewire, and the software I use to capture video has a live preview mode, but I found there was too much of a lag between my control inputs and seeing the result on screen, for the kind of accuracy a game like this requires. But it's nice for watching replays and using photo mode.
I have the playstation going into my digital tv tuner card, macrovision can be a pain in the ass, but to get around that i need to turn both devices off, turn the PS2 on, then the PC back on.
Resolution and framerate is worse than the TV tho... and thats via s-video