The video can be shot on a vacant field in about 2-3 hours with a $300 digital camcorder and a tripod. Blank DVDs are now only a couple bucks each. The only other expense is your time. It DOES NOT have to be professionally done. A college coach can spot talent if it's there to be seen.
Avoid using game footage. Set the camera on a tripod and let it roll. DO NOT hand hold unless you are VERY steady! Move it for a better view at each station. You want video of throwing, hitting, running, and any specialty skills she has (pitcher, catcher, slapper, etc.). Include tee hitting, soft toss and hitting live pitching - you can do this from behind a screen. Hit her some flies, grounders etc. Have her bunt and run to first 3 or four times. Use your imagination to showcase her skills, especially what she is very good at. If she is a pitcher, video her from several angles throwing all her pitches. The most important thing is that she has to GO ALL OUT! Mistakes are OK, lack of effort IS NOT!
If you have a newer digital camcorder, it probably came with some basic software for editing and burning DVDs. Spend a few days messing around with it and you'll figure it out. Your computer should be fairly new also. It's nice to have a Gig of RAM and a pretty big hard drive.
Remember - the coaches don't want an Emmy award winning masterpiece. They just want a realistic visual of your daughter's skills. No fancy transitions, NO BACKGROUND MUSIC, etc. Just edit out the "down time", places where you switched stations, chased balls, etc. Use common sense here. Ten swings off a tee are probably good. DO NOT edit out ALL the foul balls, missed catches, etc. If she missed that grounder she dove for, so what? The coach wants to see her effort!
Editing may take a few evenings of work, including your learning curve, but it will be worth it. You should wind up with no more than 10 minutes at most when done, or you'll lose the coaches interest.
My opinion on VHS vs DVD for your final output is this. Most laptops now have a DVD player built in, and most college coaches travel with their laptop. A DVD is very compact, so the coaches can view it about anywhere. Face it - VHS tapes had their day, but there's better cheap technology available now. Bottom line - make it EASY for the coaches!
Now, burn your video to a DVD. But BEFORE you make a bunch of copies and send them out, have her travel coach or high school coach (or both) preview it and give you an HONEST, UNBIASED opinion. Now's not the time for hurt feelings to get in the way. Take their suggestions and edit accordingly.
Then, burn your final DVD and keep this one as a "master". Make duplicate copies from this one as you need them.
Good luck!