You sure don't want PAL: you are located in the USA and therefore I assume the tapes are North American VHS. First, you should make sure that the Video Standards (in Properties - Video Decoder tab) is set to NTSCM. You didn't say what version you have, but it sounds like you got it recently, so I downloaded the latest version.Looking at the manual, there are most definitely some settings you might have screwed up.
While your gadget may not be the ultimate capture device, I doubt that, if properly configured, it would do this poorly.I did a quick Google search (you should do this too) and then also downloaded the manual for the 'VHS to DVD 9 Deluxe' version.
