A tricky problem. Now lets address the easiest part. Who and where could you find someone to do this for you. I've no idea....you could be anywhere in the world. But do a internet search : VHS enhancement service (your location)
Old recordings are "enhanced" by running them through a complex and complicated (and takes a long time) set of filters and algorithms. These enhance edges, smooth out noise, de-interlace, and other tricky stuff. But remember they cannot upgrade quality. Simply put they cannot restore information to the recording, as it isn't there to start with....they merely attempt to alter the video into something more pleasant, or acceptable.
What is shown in TV shows (CSI etc.) many believe (wrongly) that video from almost any source can be upscaled, and clarified endlessly into a perfectly sharp picture. In reality this is totally impossible. The old video can be manipulated into something more acceptable and recorded onto a DVD for you, which you can copy with no picture degredation as the copies are completely digital....
Or you can buy a good quality TV input card and record the video source yourself, and attempt to do the work with with some clever software. There are many TV cards (Hauppage, ATI etc.) and software (Virtual Dub and many others) that can allow you to experiment for a relatively small fee.
Good luck.
Gordon
April 2007