Currently, I have ATI AIW 9600XT hooked up to a basic cable feed coming in to the house and I get channels 3-125. In one room, I have a Comcast digital box that allows me to get a lot of other channels above 125 on one TV in the house.

If I go to the trouble of splitting the line after it comes out of the digital box and having one line go to the TV and one line go to the ATI (easier said than done in my house), will that allow me to record shows off the digital cable channels as well (I'm assuming yes, but decided to ask first given the work that will be required to run the line)? Will it cause any problems?

And, if I do record digital cable channels, am I correct that I need to bump up the resolution from the existing 352x480?

It's good you caught on that the digital descrambler box must come first. Most people miss that.

Analog Cable -> TV or Capture card
Digital Cable -> "the box" -> TV or Capture card

This is also a chain-of-command type thing. Since "the box" comes first, the TV and capture card will always be on the same channel.

Resolution depends on your carrier and how they have it setup. Remember that many of those signals started out as broadcast streams, so not really. 352x480 is fine. On some of the satellite-fed premiums, 704x480 would be better (and on an ATI card, the native 704x480 size is better than 720x480 for MPEG, and is available in ATI MMC 8.7 and above). Digital cable can be either digital streams or digitally-compressed analog streams. Again, depends on your provider and how it's set up.

For most tv channels and basic cables channels, I'd say stick to 352x480. For movie channels and PPV, you'd see better results at 704x480. Just be sure to use good bitrates.

I have 100-foot coax lines in my attic acroos my house from the bedroom to the office. I know how it goes. Just use good RG6 coax on long runs like that, not the cheap RG59 stuff.