There is a Profile and a Settings button on the Capture page to allow the change. I see that Stevetek already answered first while I was still checking it.
I do recall that mpeg-2 captures with pinnacle and later burn to disc after editing was not as sharp as dv-avi captures to later create a dvd(mpeg-2). That was many years ago. My xp machine had a P4 3Ghz. Today I am using a I7 and times have changed. Maybe a faster machine can create mpeg-2 on the fly much better.
Different people see things differently like there was a user who insist SP and EP mpeg-2 captures look the same to him. See this link:
http://forum.cyberlink.com/forum/posts/list/47074.page . I know dv-avi gives the best quality. A newer faster computer could narrow the quality gap considerably as stevek want to point out. Only you can determine if it makes a difference to you.
Let us know if this helps.