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I did something similar last year for my in-laws. We found a bunch of really old reel-to-reels, think like the late 50's. I ended up projecting them onto a good screen & setting the old DV cam up on a tripod. I only took it as far as transferring to VHS, but the end result was actually fairly decent.

I know there are transfer houses all over the place that will do it for a fee too. Not sure about the quality or format you'll get, but call around and see.

There are transfer units that you can buy at most major electronics stores.  They aren't really that expensive.  Basically you project the film into one side while recording it with a camcorder on the other side.  The major drawback is the flicker you get from your projector.

Most major markets have a studio with a telecine...but why bother?  The film flicker look is really kinda cool.  It exudes nostalgia.  So, just get a good DV cam and record the projection.

Hey, it works.

I've found that a nice touch is to hold a screening the same time you're making the DV recording, mic your guests, and get a neat audio commentary on the dub.  It helps if they're witty.

I captured  some really funny stuff during a projection of my aunt complaing about a fight she started with my father when they were 5 and 6 years old.  Priceless stuff.  If the footage is still around in a couple of generations it'll be incredible for some yet-to-be family member... great-great aunty Mary as a child AND an adult, still arguing with Uncle Harv about fisticufts from 110 years ago.

I've found that a nice touch is to hold a screening the same time you're making the DV recording, mic your guests, and get a neat audio commentary on the dub.  It helps if they're witty.

Yeah, my dad did that with some old footage from when I was a kid.  He showed it on the wall and was making comments about each scene to some friends that were there.  It came out really well.