A client has a PAL VCR and VHS tape he'd like converted to NTSC DVD. My AF100 only allows RCA out, not in; my Z1U can do pass-through recording on VHS, but I've never switched it to PAL except to check and see that the function worked.

Not having seen the VCR, should it be about as simple as switching the Z1U to PAL, passing through component video via Firewire to Final Cut, and then converting via Compressor? Any serious pitfalls in PAL-NTSC conversion?

Yes, it's going to be simple. VCRs don't have component out though, the best you might get is S-Video, but most likely composit.

VHS quality is very low, only about 320x240 real pixels. Straight out of your NLE it's not going to look pretty on DVD, you might want to do some cleanup first (chroma smoothing, noise reduction, etc) - not sure what's available on the Mac, on PC we have a host of filters for Virtualdub, AviSynth, or Avidemux among others.

Right, I meant composite RCA. Splendid.

How much cleanup I'm able to do will be in direct correlation to the client's budget - so likely nothing from the sounds of it.