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well, let me answer a few of your questions:
1. every card i have worked with has very good quality, it depends a lot of the source of the signal. (if you're going from your vcr or something, it may not be as good)
2. most cards come with some very basic software. you could give windows movie maker a try, but i hate that program. i like Sony Vegas, and Adobe Premiere is good too, but very pricey.
3. the data wont be stored on the card, it will be stored on your hard drive, so you may want to look into a secondary hard drive/external drive.
4. most cards for what you are looking for are in the <$75 range
5. that is going to be a part of your editing software. you can create flags/markers in almost all video editing programs.
personally, i really like my Hauppauge PVR-150. it works great with XP/Vista/OS X/Linux (i've tried it on everything) it doesn't come with any editing software, but does come with a viewing program, since it also does tv. it will allow you to record whatever it sees, then you can work with it from there.
ATI also has a few good model cards out there too.
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