DVD recorder is more convenient. It all depends, though, on how picky you are, and how much time and $$ you care to invest into the project.
I think the overall quality is slightly better when using a PC/Capture device (if you have the proper equipment).
I have Panasonic DMR models E50, E55, E30, ES15, ES20, ES25, ES18 (international model), EZ28, and EZ48, as well as 3 Toshiba DR430 units.
I have done comparisons from recordings made on those models, vs capturing to Sony Movie Studio 13 via Canopus ADVC110, and then creating MPEG-2 files with TMPGEnc Video Mastering Works 5.
Granted, the ADVC110 capture compresses to DV, then that is compressed to MPEG-2, but I have better control over bitrate, and the result is better, for the most part.
Both methods have their pros and cons, when it comes to MPEG-2 artifacts.
DVD recorder methods, in my case, result in sometimes seeing a "watery" image in some places (dark backgrounds, etc). However, on the PC/Canopus method, the watery image was less present, but there was slightly more fine pixelation going on in some areas of the picture; not macroblocking, finer than that. But I think the overall look is better.
Neither method is perfect. Like olyteddy mentioned above, with a PC, you can edit and tweak if you want.
It all depends on how much time you want to put into it, and how much a perfectionist you are. I've transferred thousands of tapes using DVD recorders, and had very, very few complaints. And that was years ago (early-to-mid 2000's), and most of the complaints were that the DVD wouldn't play in the customer's player. But that is pretty much a non-issue these days, unless they have a really old DVD player.
I would disagree that 2-hour mode of a DVD recorder is "better" than VHS, on an EZ-17. Maybe with an ES-10, ES-15, or ES-25, which, in my experience, act as somewhat of a TBC, which helps jitter and tearing. They don't have true TBC, but they do definitely help. My ES-20, EZ-28, and EZ-48 don't have the same filters as an ES-10, ES-15, or ES-25, from what I can tell.
I'm not sure about the Hauppauge unit you referenced... Does it have settings for bitrate, etc? So you will know what size of file you will end up with?
Do you plan on editing and re-compressing your files? Is that what you were doing with the EZ-17? If you plan on editing, I don't recommend going to MPEG-2 at all. Something like a Canopus ADVC110/NLE would be better. You will be capturing to DV, which is still compressed, but not nearly as much as MPEG-2.
Be aware, though, that the ADVC-110 does not have any kind of TBC etc. built into it. So if your tapes are not perfect, you may get some video dropouts. Tearing, (or "flagging") will also not be fixed. A standalone TBC would be good when capturing to PC, whether you use the Hauppauge or something like the Canopus ADVC110.
Hope this helps.