Definitely have your future in-laws do the 942. You won't be sorry, or THEY won't be sorry. But I would recommend chucking the 322 for a 625. Both are dual tuner boxes but the 625 is more robust and has DVR. The 625 also won't cost any more to install than the 322 under D*'s current promotion. With a 942/625 config you would have DVR capability in every room and HD where you need it.
The 942 would feed the basement with HD DVR, the 942 would also feed the main floor with SD DVR, and the 625 would happily feed the upstair rooms with SD DVR. I'm aware that you have not voiced a need for having DVR upstairs, but trust me, once you get introduced to it downstairs, you'll slap yourself for not bringing it upstairs. Especially when it wouldn't cost a penny more to do. However, there would be an additional $5 charge to your monthly bill. But for having independent DVR capabilities at every location, it's well worth the 5 bucks.
Ultra is right, the pic quality of the slave TV's (TV 2) won't be as good as the main sets (TV 1). Not because of the electronics in the boxes (well sort of), but because of the video output limitations (co-ax) to TV 2. On the 942, you have component (analog) or DVI (digital) options for TV 1, on the 625 you have co-ax, RCA and S-video options for TV 1, so you can bring in the best video possible for each format, HD or SD. But hey, if they were watching cable all this time, it's a 99.99% chance they were already looking through a co-ax window, and in my opinion, DishNetwork co-ax looks better than cable co-ax anyday. So they will still experience the wow factor when the switch is first flipped. But the wow will really sink in when they realize the real tag-team power of these two boxes.
BTW, I have almost the exact setup and needs as your future in-laws, except our large screen HDTV is in the main level family room and the large screen SDTV is in the basement family area, AND the config I selected was also the 942/625. Good luck!