AFAIK, Tata Sky uses the Sky+ STB from UK. Sky+ has the same DVR technology that is proprietary and does not allow copying stuff out of the box, but it wasn't difficult for users to find a way around it. All that was needed was an additional box that would intercept the signal before it goes to the TV and record / rip it off. That signal sure is unencrypted - otherwise that would mean having a Tata proprietary TV.
This Tata DVR has an inbuild HDD (500 GB, I guess) that allows users for upto 140 hours of recording. As Snake said, its proprietary - neither NTFS nor FAT. Its something else that makes hacking it difficult. But, I did read about (long back) a freely available open source software that allows a new HDD (like 1TB) to be formatted to this Sky+ format to replace the one in there. It also has an option to defrag the existing HDD without losing its contents. Due to legal issues though, this so called software still does not allow you to rip off the recorded programs. But someone sure will come up with a tool to rip these programs off from that HDD (or maybe someone already has).
And, finally, just in case, if you are curious about the USB port on the back of this SKY+ DVR box... its not for PC connection, its is a service port (like for upgrading the firmware, etc).
Although TV Tuner card option is much better for the techies, the DVR box would mean a lot for n00bs / non-PC users.
Edit: Some corrections and an answer to Naveen's question:
Naveen: You can record a max of 2 channels. If you are watching a channel, then only one "other" channel can be recorded as its somehow assumed that the you would pause/rewind the channel that you are watching. That leaves you with another channel (that you are not watching) to be recorded. If, say, you are not at home and the TV is switched off, you can schedule 2 channels to be recorded.
Correction: It has a 160GB HDD and not a 500 GB HDD.