Most certainly, this would be an inappropriate application for an 8052 on its own.

I agree with Russell, you could use an FPGA, or maybe a CPLD with perhaps a microcontroller on the side performing initialization/housekeeping functions.

On the other hand, a Blackfin processor would be up to the task because most (if not all?) models contain hardware appropriate for framegrabbing, which is basically what you need to do. Working with Blackfin processors is somewhat more involved than working with 8052s. Whatever approach you take, it sounds like you have some hard work ahead of you.

In regard to DVI, you would not capture the DVI signals directly, you'd first need to convert DVI (which is essentially several channels of multiplexed serial data) to a parallel feed and recover the clock signals. There are plenty of chips around that are designed for this task, although they're not exactly trivial to use. An example would be an Analog Devices AD9397.

Matt.