The TiVo S2 will work with Insight's mini box but yes you will have to set up the IR transmitter that came with the TiVo. However you may want to look into a direct male to male IR cable that is sold on ebay such as this:
I had issues with the TiVo IR transmitter and this cable made the channel changing work 99% of the time instead of 75% of the time. I had missed recordings all the time. The cable made by a user on tivocommunity.com. I cant remember the exact code but you will want to look at the IR codes for the Thompson cable box which ended up working best for me.
You could always upgrade them to a TiVo HD or the new Premiere. They have cable cards instead and wouldnt need this extra box."