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I'm in Canada and I have Shaw Cable. I know Shaw encrypts their TV, so (unless someone knows of a trick I hadn't heard of yet) I'm stuck using their box.

What I'd like to be able to do is to connect the set top box to xbmc and just watch the video input from it. Ideally I'd like to be able to create a XBMC menu item for the Shaw input. I'm fine with just using the Shaw remote to control it. I don't need XBMC to handle the guide or anything. I just want the Shaw input to be accessible through XMBC, rather than changing my TV input. Is this do-able?
me too Smile alas XBMC is software and doesn't have a lot of hardware inputs. XBMC runs on some boxes that already have operating systems that is supported in the Faq & Wiki's. The best you are going to be able to do; using a secondary HDMI input get your PC (which is able to run XBMC, horsepower and gfx card considerations here ) connected, or buy one of the supported hardware boxes like the Raspberry Pi etc.
Is there any way to get your cable box to relay the channel over your LAN as an IP stream? That'd perhaps work, even if you needed to insert a PVR back end (I don't think you'd necessarily have to, though).
I used to do this with Shaw but back in the days of standard definition. Since then I've moved on to using a silicondust HDHR and a small $15 antenna in the attic in combination with internet sources.

I tell you this so you understand that while I understand the concepts and indeed have experienced all the little niggles, my knowledge is out of date by quite a bit and I have 0 desire to subject myself to the second job that is capturing television from a cable box any more if I can help it.

Here's a quick rundown though --

The basic concept is you buy a device something like the Hauppauge HD PVR 2 .
You use that to capture the video from your cable box. In addition your computer will need to control the cable box (on, off, channel, etc) you use what's called an IR blaster to do this.

First, your task is to connect your PVR backend to your cable box. Don't even think about XBMC yet. You'll want to discuss this stuff on the forum for that backend (not the subforum here, you'll be going into way more detail).

If Windows MCE supports using the HD PVR then I would guess that would be the place to start. If not, then in order, Mediaportal, or NextPVR/Argus.
I'm suggesting MCE because it probably has the largest install base, best out of the box ease of use, and then if you need the others I would suggest choosing by relative install base (ie; do they have a big forum with lots of activity where you can get help?)

Now, there's a couple of caveats. I have heard of devices that can take a card from the cable company and so you don't have to capture from the set top box. But I'm not aware of that being possible in Canada. Another alternative is i've heard of set top boxes that could be accessed through Firewire or some other method and control and receive video through that. Since I don't even have Shaw any more, I have no idea how open or closed their current boxes are. As far as I know that was never possible on their old boxes either, at least the ones I had.

Good luck

EDIT: I just checked and that HD PVR 2 is currently not supported by Windows MCE, so I wouldn't recommend a Hauppauge product in that case. I'm not sure what brand people are using these days, sorry. Also, for sure no cablecard in canada and not from shaw.