Right now its virtually impossible to create an HD DVR without DRM support. The only way to do it economically is via a cable card, the cheapest HD on the fly encoder I've seen is around $1000.
For GoogleTV to really take off they need to bring the price down at around $300 its way too expensive.
I think you're right... as someone who was very much involved in the whole diy pvr scene, I was pining away for that card to come out (That hauppauge card was even the last "news" post on my site byopvr.com).
By the time the card did come out, I no longer cared. I hate DRM with a passion, but it seems I wanted to spend less time screwing with HTPC and more time enjoying content. A PS3 and netflix streaming serves the need for me nicely, along with cough usenet cough ;) for HD content.
I haven't seen it in ages, but I used to really like SageTV's UI, so maybe GoogleTV will get a better interface out of this...
That's the avenue I came up with as well. I hated running out of hard disk space, and the HD PVR kept overheating and not recording stuff. Of course, I kept the htpc, but moved to netflix and cough.
For GoogleTV to really take off they need to bring the price down at around $300 its way too expensive.