Check out this website... http://www.dvdrhelp.com/
It will answer all your video questions. Especially about encoding. There is a MASSIVE amount of information. Info on cards, burners, software, reviews, how to's, tutorials, etc....
I take it you will be working with DVD. That would really be the only reason for using mpeg2.
As far as the Hauppauge cards, see the above site for reviews. They have user reviews on a wide variety of video related products.
Before purchasing equipment and software, I recommend you start your process by knowing what it is you want to do and work from there. There are a lot of less expensive wares that may be more than enough for what you want to do and some wares with lots of nice bells and whistles you'll never need or use.