Always think you have the worst. Progressive is the way to go. So, tl;dr entire thread: if you have a Hauppauge, 720p is highest you should capture.
Does this allow you to record your voice as well because when I record with my device which is a different device it does not.
Sorry for the late answer, but no, you must record your voice with 3rd party software such as audacity.
I have the Hauppauge Gaming Edition 2 HD PVR witch does not use the conventional Component cables but instead uses HDMI, HDMI is the only way to receive Full 1080P, But as bloo said 720 is all you need to render in.