I tried it out with my trusty Dreamcast VGA box and it worked out pretty OK.
I assumed I would have to fiddle with the scaling a bit but Soulcalibur seems to work pretty well in 1080 with no adjustments. I am assuming this will work much better with other titles like Shenmue.
In addition to video capture this is a easy way to hook up a Dreamcast box to a TV with no VGA input. (This is the Atlona Technologies AT-HDVIEW VGA to HDMI Scaler which is unfortunately very expensive right now. I got it cheap on ebay.)