You can get a really cheap video capture card. I use a hardware thing that plugs into the printer port
its that old... but it worked much better than many new ones costing many times more and other gimmicks. The problem is dropped frames. Since you cant control the speed of the playback, you have to capture it in real time and compress it. But with new computers it should not be a problem to do it even in software but do get a decent video capture device. Many ATI wonder type cards have video in/out built in. Then you can use many software that converts captured data into MPEG1/MPEG2 data to use on CD's.
You dont need a PCI card, You get USB capture devices. But PCI cards are the most readily available. Pinnacle has both. IOMega also makes them. I am not sure if you can find MPEG2 hardware devices in India but those I have now seen for around $200-$300. Since MPEG2 is much harder to do in real time you do need hardware. But MPEG1 is not cpu intensive. Remember, it is not just the CPU that matters, The entire system does.