Guess I missed Puck's note on the new 6412s - didn't mean to try and scoop you!
PJ - you're correct about the "actually worse" perception when you went up to the 6412 (I think the non-DVR version that you had was probably the 6200). This is because the DVR boxes do real-time MPEG encoding of the analog channels. This is considerably worse than just the analog signal itself and then also the 300's and HD channels as well (as the encoding of those signals is done before they ever get sent down the line).
Unfortunately, the DVR boxes don't allow you to do "pass-through" of the unencoded signal - this is because even when you're watching "live" tv it's still being recorded (encoded), buffered, and then sent to your TV. This is what allows you to do the "pause live tv" thing.
The quality of what comes out of these boxes would I suppose be affected by the following: a) the tuner itself, b) the mpeg encoder, and c) I suppose whatever it does to convert that SD signal back to the component video.
What I'm beginning to think is that definitely Moto's mpeg encoder (b) sucks (although as Puck mentioned - probably is a lot better on the Phase 3) and quite probably the tuner itself (a) sucks as well (although again, maybe the Phase 3 is a bit better).
For best SD quality, you would definitely want to hook up a cable directly to your TV - of course you lose the guide capabilities and the sound through your receiver by doing this. I suppose a person could get real crasy and also hook up a second cable box and just use that for SD non-DVR'd material...
Just more ramblings....