Thanks for the info, your configuration is clearer now. However I will need some more information regarding your TV. I will need to know exactly how many input receptacles on the back of your TV, and what they are. I suspect your TV is somewhat old and has limited inputs on it.
Here is the breakdown for best quality picture from your DVD recorder to the TV.
1-Component Video is the best, that’s what the comp out on your DVD player is for, they should be color coded red-blue-green.
2- S video, it’s the small round plug with 4 pins.
3- Composite red-yellow-white RCA connectors.
Currently you are using the least desired connection with the poorest quality.
It seems your problem lies with your TV’s lack of inputs, I don’t think it has component in, nor is it capable of switching to different video modes, thus your only alternative is changing anything is by hitting the TV/VCR button.
What I would suggest you do, you can use the Liteon’s tuner by putting a two way splitter from your cable line before it reaches your cable box. One connector to the Cable box, the other to the Liteon cable in. Now you have all the channels that are on that cable signal, although it will not receive any premium channels since the cable box is required for that. I don’t know if you’re receiving premium channels?
You never mentioned how the VCR is hooked up to the TV, you only indicated wires going in not out.
Judging form the below schematic I see it doesn’t have any S Video out, I’m surprised, that will limit you on what wires you can use on the output to the TV.
In addition, if you want the best picture possible I would invest in some quality cables, the stuff you get with the units is seldom quality. You don’t need to run out and buy Monster Cables which in my opinion are way over priced. You can find some quality cables on Ebay for a fraction of the cost of Monster Cabling.
Also I discovered you can add or delete channels, follow the instructions on the second attachment.