Well, I still haven't gotten myself an H.264 capture device, preferring to wait until the new VRD is a reality. But I have experimented with Handbrake (which uses x264) to convert MPEG2 captures to H.264, and I don't like the results at all. The additional artifacting is noticeable enough even with this low-res content that I prefer to keep the MPEG2 originals even at the cost of the extra storage space.Bottom line: start your testing NOW to see if you may want to migrate away from capping to MPEG2.
There are certainly knobs and configurations that I could experiment with to see whether I could produce something more watchable, but I don't have the patience for it. I think I'll have to get a capture device like the Elgato, see how it performs, and hope that I can return it if I don't like it.