To prevent dropped frames while capturing video from your DV camera, you require a fast computer and a hard-disk capable of fast writing and disk access.
For high quality videos, when you set the output format of capture to uncompressed AVI, the amount of video data to write is quite high. At 640 x 480 pixels, which is a typical DV Camera capture format, the data to write is very high. This results in lots of dropped frames.
By setting the output format to WMV, you can minimize dropped frames as captured data is first compressed and then written to the hard-disk. This significantly reduces the data to write on the hard-disk but increases processor requirement.
To maintain good quality when capturing to WMV, select a better WMV profile (one with 640 x 480 pixels and 2Mbps (2048Kbps) bit rate). If you are getting too many dropped frames then select a WMV profile that gives 320 x 240 pixels video at 1Mbps (1024Kbps) or lower bit rate.