It means you can add an external hard drive (TiVo indicates a specific one from Western Digital, not sure if any others are supported.) The hard drive then becomes "married" to the device, expanding capacity by a terabyte. It cannot be used to move video from one TiVo to another, or anything else really. It just adds capacity.
You can get the videos off of TiVo using its network capability. You can strip off the TiVo wrapper and have an mpeg that can be encoded for other purposes, such as portable device viewing, etc.
Don't believe everything on the Interwebz! A duck's quack DOES echo!