HD and cable do not match when it comes to a WinTV HVR 850
If you want HD from your cable box, you need an HD PVR at best. If you want HD from only unencrypted channels, upgrade to a WinTV HVR 950Q (ClearQAM). Also, the only reason your videos come out "grainy" is because of the 850's limitation: it does not have AV/S-Video capabilities.
Also, if you want to record off your cable box, and you have a desktop, use a TV tuner that has IR blaster capabilities, such as the WinTV HVR 1600 or HD PVR.
I'm not trying to be forceful, but those are just some suggestions.