I've set up my DVR to record videos from, for example, Hulu.com. It works quite well, but you have to get everything right.
Here is my checklist:
Set up s-video cable:
Attach cable ("e" in cable is at the top)
Choose display properties, settings. Set the resolution for display #2 to 1024 x 768. Right click on the 2 screen, and choose Attached. Click Apply.
If things don't work unattach it and start again. Make sure cable is plugged in.
Set DVR to L2 (you should see the screen saver image)
Connect laptop audio out to MD tape in
Connect amplifier headphones to L2 audio in on DVR
Set AMP to MD (M D will display on front)
Set volume to max (63)
Make sure volumes are maxed out on the computer (hulu volume and computer volume)
Make sure laptop is plugged in via 3-prong (no ground)
Turn off deskalarm
Press Record on DVR
Put hulu window over on tv screen
click full screen
I spent a half day trying to get subtitles to work (DW likes them for when the sound is less than perfect). You can download a subtitle file for any film. The file consists of text showing what to display and when to display it, like this:
00:22:26,596 --> 00:22:28,689
00:22:28,690 --> 00:22:30,903
00:22:34,329 --> 00:22:38,086
Riverside shipyard. Shuttle for new
recruits leaves tomorrow - 08:00.
There are ways to synchronize and get the subtitles to display over the image.
The problem is that when commercials are added (as on Hulu.com), the timing is destroyed so you can't record it, although you could watch live and stop/start the subtitles.
Interesting aside: I tried synchronizing subtitles with a movie that I'd recorded from TV (we don't have closed captioning). It didn't work and I found out why: Broadcasters speed up movies slightly so that they can get more commercials in!