Let the hive mind of Engadget get that for you.
"I need help! I want a small pocket camcorder but I'm not sure which one to get. I don't want to fall into the hype of the Flip because I worry two hours won't be enough. What should I be looking for when considering a small camcorder and where can I get a good quality one with expandable memory? Thanks!"
Yeah, I'm not really sure how many people really need, or want this feature. It's a pain to have anything connected to the PC at this point, and on top of that they're charging for it.
It would make more sense to just integrate it all into the Tivos themselves, cut out the PC entirely, and make it free for everyone.
I know they want to make money, but this is just a weird direction to be spending your resources. How about making the GUI faster, adding in more options, customization, etc?
Maybe they just have a bunch of bored Windows programmers sitting around. Who knows. If you want to expand your install base, you'll need to offer stuff for free as the carrot.
It's a pain to have the PC and TiVo on the LAN? Really? This works over the network, no direct connection.
As for doing it on the box - see my above comment about why they didn't do that.