USB works fine, just attach an external drive (no real point) or RAID array (whoo, 2TB of space!) to it. I do that here.
If you're a "high end" directv customer (hell if I know the criteria... I believe it means their top-tier package as well as on-time payments for some amount of time), then you should be able to trivially get the HD DVR for $199, or the non-HD version for free.
You WILL need the new larger dish, and multiswitches/etc. to go with it. Unless you ebay this means a directv installer will have to come out (ugh!) to do it. I greatly prefer to do the install myself
Peace,
-Phil