Capturing HD content to H.264 is simple and affordable, in my experience. I am also in PAL land, and my setup is as follows:
1. The most recommended and popular HDCP stripper, from ViewHD, purchased here:
I'd advise getting it directly from that link, since there are other variations around but I can confirm that one works 100% - and it's cheap. Very rarely it might play up, but simply disconnect/reconnect and it's good again.
2. Avermedia Live Gamer Portable - can record in PC-free mode to SD card. Very convenient, and great quality (as long as you're recording via HDMI). Bitrate and resolution can be set using software, then hook the device back up to capture at the desired settings. You can of course capture directly to PC as well, with even higher quality. Just find a good price.
3. USB SD card reader - optional, depending on your set up. For me it's necessary, since the LGP provides no way to watch recordings directly from it, and I have no SD card inputs on my TV or players. This is the one I use, beautifully made and affordable:
3. TMPGenc Smart Renderer 4 - This one's also optional, but if you ever want to losslessly edit/trim H.264 video it is hands down the best software around. Believe me, I've tried all the smart cutters; literally all of them to my knowledge, including the popular VideoRedo. No contest, this is the only one that works flawlessly, with good features - and it's nice to use too.
As a side note, the Avermedia LGP creates PS3-compliant H.264 files, and since I've found PS3 to be the most fussy of all media players in what formats it accepts, the files are sure to be accepted everywhere. You can literally record, cut and watch without any transcoding whatsoever.
My purposes are different however, as my setup is for recording games but it can apply to general HD recording. Though there may be a better capture device than the LGP for that, but I do know it is one of the few that can record without the assistance of a PC. Wouldn't hurt to do some more research on this topic. Everything else on the list applies perfectly though.