sorry to answer for spec here, but I have a dazzle, so I thought you might appreciate my opinion on this one.
From what I've noticed there's little to no audio/video lag. Sometimes it does happen, but all you need to do is use a video editor to synch it up (kick back the audio 10-20 frames).
As for playing and watching, it depends on how you want to record. I use Y-Splitters, so my Wii plugs into 3 Y-Splitters, and then 3 of those go to the Dazzle, the other 3 go to my TV. The Dazzle then goes to my computer, and I capture away. By using the splitters, there is no lag at all.
As long as you have good diskspace available on your computer to capture, the quality is really clean. Here's a vid of mine using the Dazzle:
http://www.youtube.com/watch?v=C6xwc94W9lE. Notice towards the end it starts getting choppy. That's because I only had 5GB on my laptop and it captures in full AVI (so you'll have about 1 GB per minute of video). I reduce the quality into .mov's later with a video editor, and then upload it to YouTube like that.
Lemme know if you have any other questions.