What's a rough size estimate for a 1-hr show? Can you adjust the amount of compression or otherwise tweak the h.264 encoding parameters?
An added bonus of the transcode is the reduced bandwidth in the LAN. Previously I needed CAT5 for a stable ATSC stream, now Wifi suffices (e.g. to iPad/iPhone). There is an app for the iPad, to watch those streams. On iPad Air 2 it renders 1080p without lag.
Also, putting the HD Homerun in the network let's one get away with a small head unit (in my case an Intel NUC).
You are correct, the resulting files are still wtv container, but with h.264 stream inside. VLC can play them fine. Not sure about conversion to MPEG4.
A 1-hour show comes out around 1.5GB (from memory), maybe less. Much better then before.
I'd looked at options that would auto-transcode recordings on disk, but they generally changed enough things that it wouldn't maintain the metadata and/or otherwise treated them as individual videos and not episodic content.
One last question, do you happen to have any extenders? I'm using an xbox 360 as an extender and I wonder if it can play the h.264 encoded video.
My OTA DVR for the last 8 years setup has been a PC with Windows Media Center. Apart from the setup, there is no monthly cost for the guide data, as with Tivo etc. Right now this runs on a NUC, with a SiliconDust HD Homerun (HDTC-2US) living in my attic, which transcodes the OTA MPEG-2 to H.264, saving tons of disk space. A nice side effect is that I can archive shows (e.g. NOVA episodes).
P.S. One interesting tidbit I remember from a Tivo ad (but can't dredge up right now), based on their users TV consumption stats, apparently ~ 87% of what people watch is available OTA.
Edit: Windows Media Center was dropped from Windows 10. The replacement will be Xbox One DVR functionality, coming 2016.