A VCD is a Video CD. It will show mpeg (mpg) encoded files on your computer or on a DVD player that will play VCDs. Not all DVD players will accept or play VCDs but in my experience, most will.
A VHS tape will lose quality just sitting in a drawer without being played. Over time the tape becomes brittle and it can tear, snap etc. If it is played at all, the heads of the tape player cause friction and wear. You can transfer favorite tapes (if available in no other form) to your computer as mpeg files through a variety of Digital Video (DV) devices.

This is a quickie explanation - if you want more technical info - send me a pm or message me from my profile.

Kathleen