Camcorder pass-through or stand alone capture box for VHS source
This is really going to depend on the quality of your camera and the quality of your VCR.  In general, the circuitry that is used to digitize an analog signal has grown by leaps and bounds in the past 10 to 15 years, but also VHS tapes and VCRs produce limited quality to begin with.   For maximum quality you will certainly want something with an S-Video input and a VCR deck with an S-video output to maximize quality.

As far as the line input goes, I'd probably favor the line input on a high quality camera from the end of the DV era over a cheap USB capture device, but a modern moderate or high quality capture device is going to do much better than even a high end in-camera analog to digital converter.  Even cheap USB devices now are most likely better than cheap camcorders or early camcorders in the DV era, but millage will vary depending on the specific device.