Modern digital TV uses the same codecs as DVDs. There's really no getting around supporting DVD playback in a PVR. You can skip the DVD navigation stuff and the CSS decryption stuff. However, the "meat" of the DVD format is unavoidable.
Also, selling the end user half a solution just makes the result a usability nightmare.
It's far better to build a complete product and charge extra for it if necessary.
Although based on all of the noise that gets directed at Linux, any modern OS is supposed to be able to handle DVD playback and BluRay playback and Quicktime playback all without any placing any burdens on the end user.