ICOT-
I’ve only ever converted VHS to DVD by using a professional’s services. He asked me to certify that I own the rights to reproduce the material and did the job. I paid around $25 for each one.
I experienced no noticeable loss of quality.
If you are an A/V DIY guy or if you have so many tapes to convert that there is a lot of money at stake, I would recommend that the quality of the transfer is only as good as the quality of the equipment. I don’t know what you paid for your equipment, but my experience is that with technology there are two classes- consumer quality and professional quality. Even the highest end of the first class does not compare to the second class. But price-wise there is a tremendous difference.
With absolutely no actual knowledge, I would guess that your equipment is consumer quality, and not the best either. I am basing this on the USB transfer. A high-end converter would definitely use HDMI.