On a VHS tape, Macrovision is a protection that is part of the analog video signal, and it is
physically recorded on the VHS tape in the magnetic recording. It's a series of black bars in between the video frames that was originally intended to mess with a VCR's auto correction features when recording, so when you played back the recording, you would see a lot of brightness and contrast fluctuation (which are the VCR's auto correction features constantly trying to adjust for what it thinks are problems with the signal).
This was actually an exploit... VCR manufacturers could easily have fixed these auto correction circuits so this wouldn't happen, but they didn't due to pressure from the entertainment industry.
On an analog video signal from a DVD player, Macrovision is still employed the same way as the original VHS Macrovision... a series of black bars between video frames in the analog signal. However, Macrovision is
not physically recorded on the DVD itself; it is instead
added by the DVD player. The DVD Player will add the Macrovision signal if it sees a
simple text flag in the DVD's .IFO files. AnyDVD simply patches this flag so that it no longer shows up. That is how Macrovision is "removed" from the DVD.
On an analog video signal from a VHS source, since the Macrovision is part of the recording and therefore part of the signal, in order to remove it, you would need some type of device or software to replace the bars between frames, such as a
time base corrector.
Many types of hardware today (TIVO, for example) are able to detect the Macrovision signature in an analog video signal and simply disallow recording of the signal since it detected Macrovision. (It's usually added by the manufacturer due to pressure from the entertainment industry.)
AnyDVD is not video capture software. It has no code for removing Macrovision from a captured analog video signal.
If the OP is truly sending an analog video signal from a VCR to their PC, they would have to be using some kind of capture program or driver to accomplish this. What I
suspect has happened is that he somehow uninstalled AnyDVD but the AnyDVD drive filter was left in the registry. This will cause Windows to not "see" any optical drives. Again, I
suspect that this may have happened to the OP, and it is
somehow affecting his ability to use his capture software or driver. When he reinstalls AnyDVD, since the drive filter is now found, his capture software or driver now works. That is strictly a
guess based on the two short sentences given so far by the OP.