It's quantity - not quality, baby!
I record a lot of radio, so picture quality is of zero interest to me. The following settings represent the lowest picture quality I could find when recording FreeView from Scart.
Tivo reports 101 hours basic quality!
However, there is a catch. When the TiVo was set to "Save Disk Space" there were a lot of audio drop outs. Ironically, this was only present on radio programmes, not TV. Switching off VBR cured the problem. I find this slightly odd as VBR on shouldn't matter if both MAX and VBR are the same...
The picture quality for static images is fine. It takes a second or so for the screen text to become readable - but as the information about the programme is usually on the TiVo, it's not much of a problem.
Interestingly, the picture quality for moving images isn't bad! It's nothing that you'd want to watch permanently - but if you had a very small TV(!), it's quite accceptable. Roughly the same quality as a webcast on a 56k modem.
So, there you go - 2.5 times more space from your original 40GB hard disk. A 32minute recording takes up 172MB compared to 405MB on the original Basic settings.