If I am buying a TiVo, I like for them to leave all their shows on it and do nothing to prepare it to sell. But many here like it wiped clean. One negative of totally resetting it is then the person can't see that it has lifetime until they set it up, and they also can't test it fully until then.
Most Series 2 aren't worth much except if you get lucky. I have had Series 2 TiVos on craigslist for over 5 years and probably haven't sold one for over a year.
The best way to sell it on eBay is 'buy it now' as otherwise they only sell for $20 to $40 if you go the bidding route.
It is a 'lifetime service agreement' not a warranty. Yes, it can be transferred to anyone with a quick phone call.