Tivo is pretty cool... It has two main functions:
1.) Pause live TV, rewind it, etc. Quality level of recording is same as original.
2.) Record upcoming shows so you can watch them later.
It has an internal hard drive.. It also has some pretty cool features where you can tell it which shows you like and it will record ones it thinks you'll want to watch.
It costs $10/month. There's a place that has a dolby digital directTV receiver with Tivo built-in for $99 (direcTV is about $30/month and it is WAAAAAAAY better than cable). I had a dolby digital Sony SAT-A4 system that cost me $500 in '99. I sold it a few weeks ago for $505 on Ebay and bought the $99 system with Tivo

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Tivo.com Philips DSR6000 w/ Tivo, no dish Philips DSR6000 w/ Tivo, with dual LNB dish (new DirecTV subscribers only)
Despite what they might tell you, you don't need a dual LNB dish to use the DTV+Tivo system (so if you already have a single LNB dish, it will work, but you have to at least have a single LNB dish to use the directv system)- the dual LNB dish will let you record a show while you're watching another one, though.
Tivo works with regular TV or cable though too, you don't need satellite, but to take advantage of the $99 deal you'd need to go with satellite.
Scott