I had the same questions when I was looking. I went with the Replaytv because you can transfer the files to your pc with DVArchive and stream back to your Replaytv or burn to DVD. Thus giving you limitless hard drive space.
I have a cable splitter, one goes to my tv the other to my digital cable box. Then from the cablebox to my RTV. The RTV controls the cable box with an IR Blaster which puts a little remote ir emitter on the front of your cable box to control it. It takes a little longer to change channels because first you send the signal to the RTV and then it relays the signal to the cable box. You can record any channel that you can watch, even pay-per-view.
When recording you can watch another recorded show. If you want to watch a live tv show, you have to watch what you're recording unless you switch inputs and watch the standard cable or get a second cable box.
You can start recording a show at say 8pm, then start watching it from the beginning at 8:20, and with the commercial skip you watch an hour long show in 40 minutes.