Now who's leading people astray.
512MB is enough for OS X running Universal Apps only. He's only planning on using it as a video recorder so he's only going to have one app rning at a time.
The hard drive of 60gb is more than enough for several shows, how much can you watch anyway?? I'm sure he realises that if he wants more space he can get an external hard drive for peanuts.
The hybrid doesn't encode for you because it doesn't have to. It stores the original video streams undecoded to the hard drive, just like pretty much every other PVR on the market does.
Recording HD will not put any more of a strain on the machine that recording SD material and as such will not lead to higher temperatures since its only saving a stream. Viewing HD material will of course put a higher strain on but nothing worse than maxing out a computer is meant to do. Higher temperatures don't matter if its designed for them.
All in all, it will not "suck". It will perform the task amicably. Additional RAM and a large external hard drive are cheap additions later on for if you want to store more material and use the machine for more than a bit of web browsing and PVR duties, i.e. in particular non-Universal Binary apps such as Office.