Well the press release doesn't say anything about an encoder and the line "can be recorded at broadcast digital quality, significantly improving the quality of digital terrestrial programme recording." would seem to indicate it records the bitstream in the same manner as SKY+.
Personally I approve of dual tuners in a single STB especially when the can both be used to view programming at the same time (unlike SKY+ with it's single decoder) on two displays.
Of course if you already have a DTT reciever or IDTV that suits your needs paying for a new piece of kit with two tuners can be seen as a waste.
At least PACE have got the ball rolling, crossing fingers that Nokia and Panasonic brings out similar models soon.
I have yet to enter the muddy waters of DTT but this could be the kit that makes me jump in head first
I emailed Pace about the small HD and was told that this design would not have a larger drive and there wouldn't be an "official" upgrade path which is a mistake in my opinion.
It will probably be easy to replace the HD just like you can with TIVO and SKY+ because while 10 hours (approx) is ok for recording day to day stuff it means you couldn't leave a couple of long (2hours+) programs on for any length of time.