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Not easily. Most computer output is not what I'd call "true" 1:1 analog output. The quality is altered (softer). And the interlacing doesn't really match up, so you'll be forced to use player deinterlacers, or slow Avisynth deinterlacers, also resulting in reduced quality. You'd be better off with an MPEG encoder from this kind of digital source file.
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2. If so, can I do it with an USB/(red,white,yellow cables) port?
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Can it be done? Probably.
Will it look good? Unlikely, but you'll never know until you test it. Those cables vary highly in quality and function.
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3. And the most important one of all: If this is possible, what DVD Recorder (with built-in hard drive) do you folks suggest in terms of resulting quality and encoding?
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This one:
http://www.amazon.com/RCA-DRC8030N-R.../dp/B000US4JKE -- The RCA DRC8030N with 80GB hard drive
The Zoran chipset makes gorgeous encodes when the source is already clean. Rich colors (not fake or over-saturated), zero flaws in IRE or luminance, very fine-grain block-free MPEG encoding quality. If a DVD recorder could ever be accused of having a "film look", this is it. It's just really nice. It's not suggested often because it only looks good in a narrow set of circumstances. Plus it's usually somewhat hard to find -- it's a fluke that
Amazon has one used, and for only $125. New MSRP was $300, and worth every cent.
Hope that helps you.