The 28 day rule means that if TiVo records a specific episode of a program, it will not schedule it to record again for 28 days. This helps solve the problem of, say NBC, running an episode of Heroes on Monday, then the same episode on Saturday night. If TiVo recorded it on Monday night, it will not attempt to record the same episode again for 28 days, thus skipping the Saturday night showing.
Same thing applies to, say, Mythbusters on the Discovery Channel. They run the same episode on Wednesday night at 9pm, then the same episode at midnight. Since the 28 day rule is in effect on TiVo, the midnight showing is not recorded (as long as the 9PM showing was).
Hope that helps and if I'm missing something, someone will correct me pretty quickly.