That is incorrect.
TV 1 and TV2 coaxial out are modulated from the single agile output on the back of the 722 and activated via the menu.
The quality of the picture depends on how good the cable is and how long and how many splits.
Parts Express:Channel Plus DA550HHR Video Distribution System
I use one of these for the rf distribution in the house. It allows me to combine the OTA and the rf output of the 722 into a single cable to go to 5 other rooms.
Here are some pics of 2 of my wiring cabinets. sorry they are a little blurry, but I distribute via rf and component video to 2 lcds and 4 tv's total. The main tv is connected via hdmi and I have a component video distribution cabinet in the next closet that sends the component out from the 722 to the other 2 lcds, but all the tv's are also connected via rg6 to the tv1 and tv 2 output of the 722. I normally run it in single mode unless kids or guests are here, then I switch to dual mode and have extra rf remote in each room.
I have been getting some interference from a new radio station the past month so I have used some of the cat 6 to send component video to the lcd in the master bedroom instead of the 5 rg6 cables that are also in the walls.
Wire is cheap to install in new construction so I usually go the overkill route, so I can deliver video by any means I want.
I would probably recommend two dvrs, so you don't have to share a tuner with kids and they would have a couple of tuners to divide time between.