1. You should be able to get a Liteon 5045 (
http://www.amazon.co.uk/exec/obidos/...406369-8445441) for under £300 - 160Gb drive, multi-region hack and supports all DVD formats
except DVD-RAM. I have the LVW-5006 (no HD) and it does it's job pretty well.
2. TBH anything less than 3Hr mode on DVD is not going to be worth keeping, unless it's just for PC viewing! I usually use the 2 hr mode.
3. You can set the chapter timing on the Lite-on drives, eg every 10 mins, but I found the best way to handle recording a movie to keep (for personal use) is record it on DVD+RW, use Nero Recode on the PC to change the chaptering and menus and burn it back to DVD+R.
As for 8hr VCR's, I would probably try getting a TV capture card and using Nero to recode them as either MPEG4 (if you have a DVD reader than will view them) or record on to four DVD's!
HTH