A Video/Audio capture card is nothing more then a Analog-to-digital converter ..
http://en.wikipedia.org/wiki/Analog-to-digital_converter
Video in the form of S-video and Composite is analog, Audio from a Microphone is analog.. People are analog devices too ;) Computers are electronic binary computing devices that work in the digital world of 0's and 1's.
New Video cameras that are high definition use a digital form of capture but there is also a hidden Analog-to-digital converter inside them too that convert light from the sensor to digital data and same with the audio. Just the output they produce is normall threw HDMI which is a digital output, but they also have standard outputs too like S-video and Composite so again they convert Digital back to Analog form for old type equipment like the standard T.V..
Okay won't go into more detail a definition from internet below.
Definition-
Analog-to-digital conversion is an electronic process in which a continuously variable (analog) signal is changed, without altering its essential content, into a multi-level (digital) signal.
The input to an analog-to-digital converter (ADC) consists of a voltage that varies among a theoretically infinite number of values. Examples are sine waves, the waveforms representing human speech, and the signals from a conventional television camera. The output of the ADC, in contrast, has defined levels or states. The number of states is almost always a power of two -- that is, 2, 4, 8, 16, etc. The simplest digital signals have only two states, and are called binary. All whole numbers can be represented in binary form as strings of ones and zeros.
Digital signals propagate more efficiently than analog signals, largely because digital impulses, which are well-defined and orderly, are easier for electronic circuits to distinguish from noise, which is chaotic. This is the chief advantage of digital modes in communications. Computers "talk" and "think" in terms of binary digital data; while a microprocessor can analyze analog data, it must be converted into digital form for the computer to make sense of it.
A typical telephone modem makes use of an ADC to convert the incoming audio from a twisted-pair line into signals the computer can understand. In a digital signal processing system, an ADC is required if the signal input is analog.
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