The configuration and setup of these type of devices always varies by manufacturer. I have an ADS Tech "DVDXpressDX2" analog capture device, and it works great for capturing VCR footage to digital video (which I then burn to DVD).
For my device, I simply setup a VCR near my computer, plug the white/red/yellow Audio/Video cables from my VCR into the DVDXpressDX2 and then plug a USB cable from the DVDXpressDX2 into my PC.
After the initial setup, I had to install the ADS Tech "CapWiz" software.
After that, it's as simple as pressing play on the VCR and then clicking the record button in the CapWiz software.
The software and setup for your ATI will probably be a bit different, but it should be a similar process. If you've tried everything and still can't get it to work, I recommend reading through the instruction manual and calling into ATI Tech support if needed.