After more investigation I found the crappy AVer software only encodes with a max bitrate of 15000 using MPEG-2 video. It offers H.264 as well, but I think H.264 encoding is restricted to SD resolutions, and the bitrate is far too low for any decent quality. So capturing HD with the included AVer software seems to be not very promising.
I noticed the AVer HD DVR is on sale at the Egg and the Tiger now, and the price is real attractive after a $10 rebate (free shipping + no tax).
Well after doing some more digging, I found that some gamers are saying that they can use a shareware software called FRAPS to record their HD game play with the AVer card. I had never heard of FRAPS so I looked it up.
It appears that FRAPS is designed for high-end sophisticated video capture--the latest version even allows you to capture lossless uncompressed RGB (if you have large enough and fast enough drives). It also seems to offer a "near-lossless" encode which uses a very high bitrate to maintain max quality, but just enough compression that you don't have to worry about your disks not being fast enough to write the massive amounts of data.
Here is a YouTube clip where a fellow claims he can use FRAPS to capture rather than using the crappy bit-rate limiting software AVer provides. He claims you can capture with very HQ if you use a 3rd party external capture software.
Test and Review of the Avermedia Aver HD PVR - HDMI Capture Card - 1280 x 720http://www.youtube.com/watch?v=ieiuQsN45FI
In the comments section he also mentions that he successfully used Cyberlink's Powerdirector 8 software to capture at 25000 bitrate, with much better results than the 15000 limit on the AVer software.
So it appears that 3rd party external software encoders can be used with the AVer PCI-e card.
Now, I know that some people are still not impressed because this card only does 2 channel stereo. But for the videophiles out there that demand the best quality, why couldn't you just use this cheap AVer card to do uncompressed (or very little compressed) video captures, and then also capture the 5.1 surround sound from your set-top box programs with the HD PVR 1212, and then simply strip out (de-mux) the audio from the Hauppauge capture and re-mux it back into the HQ video capture from the AVer card?
Sure, you might have to do a bit of minor snipping here or there, and you might have to delay or advance the audio a bit to get it to sync up, but it doesn't seem like it would be insurmountable to get very HQ video from the AVer (using FRAPS or something like this), mated with 5.1 audio from the Hauppauge HD PVR 1212.
What do y'all think? Any holes in this plan? I am seriously thinking of getting this AVer card now that I know you are not stuck using the included AVer encoding software.