1. Repeat the Tivo's Satellite Setup. At the appropriate step, specify that both tuners are connected to your dish.
2. This could be "normal" MPEG compression artifacts. Or perhaps one of your TV's "video enhancement modes". For example, many LCD HDTVs now provide "120Hz motion compensation" (some even 240Hz) that can actually make SD video, like your Tivo's, look worse.
Sony SAT-T60 120GB (v3.5b)
HR20-700, HR20-100, HR21-200 HD DVR
HR10-250 HD DVR 400GB (v6.4a)
H21-200 HD Receiver
R10 DVR 160GB (v6.4a)