For the first issue, the "Wrong Signal" error basically means that the loaded disc has been initialised with the wrong TV standard. For example, if you load a blank disc when the DVD recorder's video mode set to 'PAL', then the disc is prepared as a PAL disc, which means that if you set the video mode to 'NTSC' and then attempt to record on the disc, the recorder will refuse to record. In order to record an NTSC picture, you need to first set the TV format to 'NTSC' and then load a blank disc that has not previously been loaded/prepared.
For the second issue, it appears that the Lite-On is picking up feedback from something, such as a Scart lead plugged into the wrong AV socket. Just make sure that the bottom Scart socket on your DVD recorder is connected to the TV and that the top Scart socket is connected to the 'TV' Scart socket of your VCR (or with the macomaster looped in-between).
This is the time I've encountered anyone with an issue with the audio echoing on the Lite-On. Alternatively, try a process of elimination, such as first try the DVD recorder on its own and try watching TV through it, then try connecting the VCR to the DVD recorder and check for echos and finally try placing the macromaster in-between. If you get echos with just the DVD recorder itself connected to the TV, I would recommend getting it repaired, especially if it is under warranty.