The usual reason for this is your PC is just not strong enough, but my hardware was more than adequate (Nvidia GTX 1080, i7-3770K, 16GB RAM). I updated all my drivers, ran virus scans, shut down all background processes, ran programs like MSI Afterburner to check if my CPU or GPU were having trouble (they weren't), I unplugged ALL other USB devices (including my mouse and keyboard) and tried every USB port on my PC, and still couldn't find the solution. I even tested the same capture unit and cable on a friend's PC and it worked fine. Then I upgraded from Windows 7 to Windows 10 and still had the issue.
After many hours of troubleshooting and experimenting, I found the problem: the USB drivers for my motherboard! My motherboard is a Sabertooth Z77, and i had diligently installed all the updated drivers. But the USB drivers caused this issue. I uninstalled them / rolled them back and the problem went away!!!
Here's the device in question:

ASMedia USB 3.0 eXtensible Host Controller
After I rolled back the drivers, the problem went away! Here's what the driver details look like now:

Now it runs like a dream! It's super smooth and I can do tons of other things at the same time (like stream or watch videos) with no issues!
So just thought I'd post that here in case anyone else is in the same situation!
