Page 62 of the users manual states " When recording, you must make the same type of video connection between components". I tried to record the video signal from a VCR connected to VCR-1 w/composite cables (VCR has no S-Video jack) and a dvd recorder (line in jack) through my Yamaha. I got no video signal on the recorder until I switched from a S-Video cable to a composite. I thought with the new receivers you could "mix and match" components, but apparently to "record" from one to the other via line I/O, all hookups must be identical, at least in my example and what is stated in the manual. The manual does state that converted signals are output to the monitor out jack for viewing, but for recording all must be identical or am I missing something?
I have mine hooked up differently so I havnt had to deal with that issue, but based on what you've just said.........it appears you arent missing a thing.
The way I record is by hooking an extra set of analog outputs from my satbox directly into my VCR. Then to record, I turn my VCR to it's AUX mode, and I can record without any problems. My VCR only gets used about once a year, so I make due with the lousy VCR picture for the extremely rare occasion that I record. Once the HDtivo's drastically fall in price, I'll dump my VCR in the trash.