You really only need add tuner. On existing models that could be accomplished with a usb dongle. A QAM tuner and whatever is necessary to decrypt the signal isn't very power hungry in comparison to the hard drive and all the video processing which the xbox is already capable of.
for the xbox to really function like a DVR, they would need to find a way to bootup much quicker. set-top boxes are almost instant on. they would also need to find a way for it to record when "turned off".
You mean like this:
http://www.youtube.com/watch?feature=player_detailpage&v=IcH8n_oFf0c#t=23s