1. It is an "appliance" DVR. TiVo is suited to anybody that watches TV from traditional sources, but is generally being adopted by technologically affluent middle class/upper middle class people.
2. Right now, Microsoft isn't much competition, since they are offering an HTPC solution with all the complications of a PC, rather than a plug and play appliance as TiVo is.
Really, there is no current direct competitor to TiVo, although indirectly there is with most provider boxes.
Series 2 234 Hr Lifetime.
Window XP and Ubuntu Linux on my PCs.
Watching more and more in HD direct now.