Windows Media Center is designed to allow you to receive TV programming from a terrestrial, satellite, or digital cable set-top box, but does not directly support video capture and archiving from a camcorder or a VCR. For video capture and archiving, you can use Microsoft Movie Maker (included in the MCE build) in conjunction with DualTV's A/V input capabilities.
However, technically you can connect a VCR or camcorder to view live or recorded programs on MCE itself. In this case, you need to have an MCE compatible remote/receiver connected and respective driver loaded in order to complete MCE setup as if the VCR you are connecting is a set-top box. Note that, however, MCE does not actually control the VCR via the IR blaster. You have to manually set the channel on the VCR.