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What is a good approach to convert hi8 to blu ray. Quality vs. Quanity?

I have a friend who asked me to convert his old hi8 tapes to blu rays for archiving.  He gave me 20 tapes about 50-80% full.These videos are just your classic home-videos (wedding, vacations, kids, etc.) shot on hi8 tapes. Nothing fancy.

I plan on buying a 500 gb external drive and capturing to that, then converting and burning the captured files to blu rays (using Sony DVD Architect Pro 5.2). This way, I can give him the external drive with the digital files as a spare to the blu rays. I'm using one of those video-capture-usb tools and connecting to the camera through a composite out.

I captured one tape already as a .avi
It came out as about 1.8 GB, Codec xvid mpeg-4, 640-480, at 29.97 framerate.

I want to fit as many tapes as possible on the blu rays without noticeable quality loss. Any insight on if/what I should compress these to before burning?
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Personally, I would just go with the MP4.

I don't know if doing them in Hi-Def would do anything, but make the files bigger. Maybe somebody else has a better notion on that.
Hello MagicalComputingSolutions
The quality will depend on your video hi8 tapes at the source.
Burning them to Bluray in my humble opinion is an overkill.
And too expensive.
Burning them to good quality DVD platter such as Verbatim Sony TDK using AVCHD (Advanced Video Coding High Definition)[ will be just be fine.
Use Verbatim/ Sony and or TDK with a burn speed of x4 written on them, Burning DVD should be slow
Also this type of DVD will support most DVD players.
You will need to select NTSC or PAl suitable to your country.
Bluray will complicate it.

Remember that any format you have now will be converted/authored to a DVD compliant mpeg2.
You know they can be can burnt/authored to DVD using windows movie maker. .
Windows 7 has the inbuilt DVD maker
including WMM

If possible capture in mpeg format rather than avi for the DVD burning purpose since recoding and re-processing them each time from avi to mpeg2 you lose quality..
mpeg2 DVD compliant uses a Video scale size and aspect ratio  of  720x480

Otherwise you could keep the captured  avi but I would suggest to capture to your desktop then transfer to the external HDD.
Since your divx  avi> 1.8 GB, Codec xvid mpeg-4, 640-480, at 29.97 framerate.<< 640x480 is smaller than the DVD compliant of 720x480
 Just use your the external HDD straight to your digital TV USB.. most new digital TV  will support this format straight off the USB external HDD and have a USB socket at the side or back.
Plug the HDD into the TV USB socket put the TV onto apps > select USB and you will see menu just like the raspberry Pi.
Choose movies from the selection.
I took a photo of my TV with just a USB Pen Drive straight into TV ,
put onto apps then this menu, select Movies
USB Pen Drive straight into TVthen you will see all your video previewed in small thumbnails.
Press play on your TV remote control.
I took a photo of my TV 68 CM digital with a USB HDD plugged in and playing an divx avi video.
The menu can be put away using the up down in the centre, showing the menu I just press ok in centre of the TV remote control... It is my unsteady hand that made the video a little shaky however the quality is just fine. Nice and clear.
 Divx avi Movie on a USBTest it out with a USB pen if you have one. Put one of the divx avi on.

With regards to mp4 format, this is not supported by our TV so plugging the USB drive straight into it's USB is no good.
Digital TV will support divx avi and mpeg via USB.

To play this beautiful mp4 quality as is without reprocessing to DVD Video
you could buy a fully packaged raspberry Pi with XBMC media centre.
Including an audio cable and hdmi cable
Then simple plug the USB HDD/ or a flash stick, I use both
 into the raspberry pi and the plug the rasberry Pi into your TV HDMI.
The raspberry Pi will support the avi/mpeg/mp4..
 These new Raspberry Pi also include a remote control the rsapberry Pi player is now comes in a case and openelec already installed with XBMC.
Or these streaming Raspberry Pi

This way you can have the DVD Video as well as a portable player USB HDD
I have mine like this since mp4 High Def is just beautiful and solved my problem with how to play mp4 straight onto the TV
Illustrated Raspberry Pi on a TV

Here is a set of images showing the menu of the Raspberry Pi
Hopefully I have covered it.
Any questions?
Regards Merete
Any progress?
MagicalComputingSolutionsAuthor Commented:
Thanks for the Help !!
Your welcome. Thank you.
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