My machine: LiteOn LVM-5005 bought at Costco in the U.S.; manufactured Nov 2004; System LNFA1091.ESU, Drive LNFA1000.E30 (latest upgrade as of December 13, 2004).
I have discovered a trivial workaround for the inability of later-made LVM-5005 machines to record a macrovision (MV)-encoded signal.
On the LVM-5005, start recording from a source that does not contain MV. A blue screen or the splash screen of your DVD player will work fine.
Just after the recording has started, press (pause).
Start the source that contains MV. For a DVD movie, this would mean loading a disc, navigating through the menu and and starting the movie. For a VHS tape, this would mean starting it playing. (A paused source that has MV will not work, as even the still frame contains MV within its vertical blanking interval.)
Press (pause) again to resume recording.
From my preliminary experiments, this seems to work just fine. The recording can be paused and resumed multiple times this way. What seems to trigger recognition of the MV signal, and stoppage of the recording, is if the source is interrupted in a way that alters the vertical sync. For example, complete stoppage of an MV-encoded source (e.g. full stop of a VHS tape) followed by playing (but without pausing the recording process) will cause the recorder to stop recording. My guess is that the machine disables the MV detection once a clean, non-MV vertical blanking interval has been detected, and somehow pausing the recording does not reactivate it. (Perhaps this helps reduce 'false' detection of MV?) Unfortunately this means that if your MV source has any vertical sync errors (e.g. a frame jump) the recorder will recognize MV and stop. So for VHS tapes, make sure the tracking is adjusted as good as possible.
An interesting use of this workaround might be to create a still image, such as a still frame from a movie, that can be recorded to a CD-R and played from a source machine when the recording is started. This image will then be the first second of the recording, and will also be the image displayed in the thumbnail of the menu.
I have only tried this trick using the RCA video in on the back of the machine, but I can think of no reason why this would not work with the S-video connection. Similarly, the choice of blank media should make no difference, although I have tried only DVD-R and DVD+R.
Anyone who has tried this workaround and has been successful, please post your experience to this thread; I am interested in how universal this trick may be.