Steps
1. Download and install iTunes 6 for PC.
2. Download and install DVRMSToolbox.
Media Center files are recorded in a format called DVRms, which I think is MPEG2
with an xml wrapper. DVRMSToolbox allows you to convert DVRms to more accessible
formats. You have to install the latest .NET framework (shiver) if you don’t
have it. I went with .NET
1.1 instead of 2.0 beta.

5. Now that you have a generic MPEG file without commercials, you need to process it into an MPEG4 video file the iPod will take. If you want to stay on the PC side, pay to unlock QuickTime Pro, follow Apple’s instructions, and sync the video to your iPod. If you want to do it for free, take the MPEG2 video from DVRMSToolkit to your Mac and process it with FFMpegX, following Mark Pilgrim’s tutorial. I thought for sure that PSP Video 9, a free Windows program, would work, but I tried a bunch of different settings and couldn’t make it happen. Please leave a comment if you know of another free Windows tool that would do the job.
6. Annnnnyway, at the end of all this, you are here:

You’ll notice
the clip is only 33 seconds long; I encoded just a clip so I could get the
screenshot quickly!
Sync your iPod and congratulations: you’re a pimp. With luck these instructions will be swiftly obsoleted by some clever soul who writes a drag-and-drop app for converting DVRms files to iPod-ok MPEG4 or, even better, a one-button sync plug-in for MCE.

Look, it
works! Yeah, it’s a bad photo.