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onboard MPEG2 encoding. The chip seems to be closely related to the
one used on the PVR-150/250/350/500 cards. Assuming the HVR-1600
drivers are mature the quality should be comparable to the PVR-500. I
don no have a HVR-1600, but it may have more than 1 /dev/video device.
If you are using software encoding with that card it may explain some
of the quality problems. See if you have more than 1 /dev/videoX
device for that card and then make sure Myth is set to record from a
MPEG2 capture card not a V4L based capture card.

Cheers,
James