No, it doesn't look like you've missed anything. According to the manual, you can schedule a timer recording only to DVD or HDD. The sections on manual and TVGOS timer recording do not include the "VHS" indicator. Even the "VCR Plus" system records only to DVD or HDD.
You'll have to record to HDD (or DVD) first, then copy to VHS (in real time, of course) using either the copy navigator or the 'advanced copy' mode.
You'll have to record to HDD (or DVD) first, then copy to VHS (in real time, of course) using either the copy navigator or the 'advanced copy' mode.