Won't Capture Anything other than 320x240

I am using a CTX MD001 capture device in "composite" mode recording from a
VCR into my PC: 3.3GHz, 1gig RAM, Geforce 6600 256mg AGP, 380gig HD space,

I'm importing music videos right now and would like to bring them in
finished, under 100megs and 640x580 but I get these errors:
1. "The video Device is currently in use. Close anyother application that is
using the device and try again."
2. "Unspecified Error."

I'm new to video editing and need to know if there is some kind of limit, do
I need some new codecs or am I doing something wrong? It will do 320x240

Aloha, MC