Converting from VHS to Digital Media - best digital encoding format to use

Looking for a little insight into the VHS to digital media world.
I have several VHS tapes (~30) which I would like to convert to digital media for further editing. From what I can find online most “Home Movie” conversion companies encode to mpeg2 on a DVD.
I have done some of my own VHS to DV format conversions but has many of you know this is very time consuming and I would like to locate a company that can convert my VHS to DV and return back to me on a hard drive. In addition I have taken these conversion edited them in FCE and made DVDs in iDVD. Now I am looking to outsource the conversion process.
I am looking to have delivered the raw DV converted file from the VHS conversion. Does anyone know of a reputable / reliable Conversion Company that can supply this service?
If you think I am going down the wrong road in asking for the raw DV files please let me know and explain what you feel the best alternative is so I can edit in FCE and why this or that method is better, just as good, or is done as raw DV files from VHS tapes are just not required for some reason.
If this is the case what is the best digital file to be working / editing with in FCE? The file format I should be asking for from a video conversion company.
Thank you,
Keith

Some thoughts, all of which you may have already considered:
Each hour of video will produce around 13GB of QuickTime files, so thirty two-hour VHS tapes would consume almost 400GB.
Thirty DVDs will be a lot less expensive than a 500GB hard drive.
Given the native resolutions of the different formats, my guess is that, if you had your VHS tapes converted to DVD, then converted those files to QuickTime for use in FCE, you'd have a hard time distinguishing that footage from what you'd get by capturing directly to QuickTime from those same VHS tapes. It might be interesting to do a comparison.

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