I downloaded the tweaked drivers mentioned above, and after some fiddling was able to get the right combination installed.
While I was there I noticed a shareware VCR application specifically written for W2K, so I tried it. I get the same "hanging" behavior with this application as I do with PowerVCR that came with the IO Magic card. I am now beginning to feel that I have something wrong with my OS install. I have SP2 and all other updates installed, and there are no conflicts or other problems in Device Manager.
Any ideas or suggestions out there?
As as an aside, I read somewhere that Dscaler does not need a driver at all as it loads its own on startup. As part of the fiddling I mentioned above, I tried to run Dscaler without any drivers, and all I got was an error message, and it would not run. Once I installed the tweaked driver, I seem to have improved performance in Dscaler, but that was not a thorough test...