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There are several ways to do this, but using the USB is not one of them.
The easiest way would be to buy a Stand-alone dvd burner. This is just a standard dvd player that hooks to your tv, but it will also record like a vcr. If you can get one of these, you can just hook the av jack from the camcorder to the rca inputs (red-white-yellow) on the dvd burner/player.
If you want to use your computer, it would be best if you can borrow or buy a digital 8 camcorder with a firwire port (IEEE 1394) that can play back Hi8 anolog video. Some digital 8 camcorders can’t play back Hi 8, so just make sure you have one that can. Most digital 8’s will specify this feature. The bad thing is that you can’t usually buy these camcorders in the stores anymore, but you can get them at pawn shops for like 50 bucks.
The other option is to buy an anolog to digital converter (AV to firewire converter)
Eitherway, once you have your camcorder hooked to the computer, you will have to have capturing software. If you have windows, your computer is probable equipted with movie maker which will work just fine.
Once you have the video captured into the computer, you will have to get dvd authoring software. There are many free trials and the options are abundant. You mave have an authoring program on your computer already, like sonic dvd.