I'm hoping that we'll see it this year. Verizon is not the swiftest when it comes to s/w updates, but from my experience (coming from DirecTV) they're pretty well-tested (yeah, some new bugs get introduced, but it's nothing like what I went through with DirecTV). It should just be s/w based. One thing that's interesting about Verizon's architecture - read this in an interview with one of their senior execs - most of the 'data' surrounding the TV service isn't stored locally on your set top box/dvr. It's stored on their servers.
For example, if you pull the plug on their DVR, the box will come back in about a minute, after you plug it in. Really fast. Before they did their own guide s/w (when they used Microsoft's piece of crap) it would take 15 - 20 minutes before everything came back. The reason they come back so fast now? They don't have to load all the progamming data back onto your box. So, after I reset, if I search for a show in the future, it'll find it, even if I JUST came back from a reset.
In other words - they rely very heavily on providing stuff as real-time as possible on their network, which is really cool. You'll see changes happen, even when there isn't a s/w upgrade that comes down (which threw me the first time that happened). One stupid example of that - they started 'decorating' their menus for particular holidays - we got roses on Valentine's day, e.g. All of that tells me that their DVR-DVR streaming will be handled via s/w update, and not hardware.
I also understand that a new DVR is coming. A couple years ago Verizon put in an RFP (request for proposal) for a new generation of set top boxes. They got several responses back, and apparently they DID choose a manufacturer, but they've never disclosed ANY details about the deal. Apparently that deal is set to come to fruition - I keep hearing different time-frames, but this fall is a time-frame that seems to be the predominant one. We'll see. Hopefully that'll mean: more harddrive space (or at the very least an active ESATA port).
That's probably my biggest nit of their hardware so far - the harddrive is way too small.