Hello,
If they drop-down menu only shows your webcam device and not the USB device that the VHS is connected to then that points to the Device not being recognized by Windows. If you unplug the device and plug it back in, do you see sort of error message or installing device message in the lower right corner of your desktop in the notifications area?
Opening up GoldenVideos with my EasyCap device installed, the "Video Device" is called "WDM 2861 Capture" and the "Sound Record Device" is listed as "Line (USB EMP Audio Device)" If you do not see these options, then I would ask you to unplug the device, re-download the Driver found here: http://www.altoedge.com/drivers/vidusbec/w7-64/win7.zip, unzip and run the Setup file, restart your computer and then plug the device back in to see if it is properly recognized by Windows before starting up GoldenVideos again.
AltoEdge