you could link a digital camera up to you TV and record whilst playing the video.
Plug this into you Mac and capture using i-Movie (very simple) and this can then in turn output a Quicktime file for DVD which you can also burn using i-DVD (also very simple) on the new generation G4 macs, but i'm unsure about iMacs
However if your catalyst is to obtain better quality it wont work as VHS is about as bad as it gets and that's your starting point.
I would think that production companies will offer this service of maybe high street repro's like 'Joe's Basement.'