Gizmodo has a story on what may be the first photos of a stripped down HD TiVo. There was speculation soon after the $799 Series 3 HD TiVo launch that they'd eventually do a cheaper $299 version with less features, but the photos from this gizmodo post look pretty rough and show it having dual tuners which seems like a stretch for something supposedly thin on features.
A bigger issue with TiVo is their upcoming marketing strategy if this is a real product coming out. They've got the high-end HD cable market with the $600-800 Series 3 TiVo, and Comcast is now chipping away at the low end with their soon-to-be-rolled-out TiVo-powered Comcast HD boxes. If they introduce a cheap HD TiVo for say $200-300, I think it'd hurt Series 3 sales as well as be a confusing option given the cheaper Comcast box. At this point, it probably makes more sense to try and bring the Series 3 box down to maybe $399 and leave it as their only HD TiVo offering.