It’s a real product.  It’s been successfully implemented in Microsoft’s eHome lab.

What does that tell us? It tells us the research and development money has already been invested.  From an economic perspective, this is a  sunk cost.  Future decisions have to be made based on their own merit. 

The operative variables at this point are only the cost of pushing the product to the market and the potential gains of doing so.  DirecTV obviously believes in the profitability of such a product or they wouldn’t have invested so much in its realization.  Releasing this product is sure to result in more subscriptions and more hardware sales (they aren’t going to give these tuners away for free).

I can personally vouch for this: DirecTV’s programming is attractive as it is.  My biggest reason for not adopting it (next to increased monthly cost) is my devotion to media center. As a hobbiest I am absolutely unwilling to surrender my control to a stock DVR. 

Anyway, this topic has see excellent coverage by others. If you would like to read more extensive coverage, see Chris Lanier’s write up. He asseses who is likely to blame for the current suspension.