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4) Only if you own the unit.
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what are my options for the HDR-250 that I own.
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I think that was already made clear.
My recommendation would be to sell your HDTivo on ebay and then purchase an S3 Tivo to use with Verizon. You should be able to get about $400 or more for the HDTivo. You can get two cablecards from Verizon that will allow you to record all channels you subscribe to without the need for an external settop box. I just paid $615, delivered, for my S3.
You can currently get a 3-year subscription to the Tivo service for $299, which is the same price as their 2-year plan, for a monthly cost of about $8.31. Add in the monthly fee for the two cablecards (approx $3 apiece, but YMMV depending on your local FIOS rates) and you're still in the same ballpark as the FIOS DVR, but with higher capacity and better software.
You won't need on-demand with a Tivo since you can archive whatever shows you want, especially when it comes to kid's programming. You'll save yourself the monthly fees for the VOD service that way. Note that you can always upgrade the drive capacity in the S3 Tivo so you'll always have plenty of space for your kid's shows as well as yours.