I just gave up the ghost and returned my last (of four!) 5006 to Radio Shack. I'm not new to DVD recorder problems either. Had an Apex at Christmas that was a piece of junk in a different way. I also produce video so am not a newbie to the technology or capabilities.
I saw the 'jitter' or dropped video frames just as you do. Since I had mine set up so cable went through it I would see it crop up after the machine was on for a while and it got a bit warmed up. As I put in another note, the output from the 5006 seems to always be from the end of the A to D and D to A converter. When the video has a lot of movement it can't keep up and you get dropped frames. I'm familiar with this since it is like the 'catches' you see in commercial video conferencing.
In my case changing the default 'speed' (SP, LP etc) made no difference in what I saw. It didn't always start immediately, sometimes it took longer before it started, then it would come and go. I think it is related to the machine running out of 'cache' memory during the compression. But that is only part of the problem with these units. BTW, ml last unit had one of the latest manufacture dates, November 2004.
I think the other issue is heat. When I ran my 5006 with the cover off I would get the jitter, but it didn't seem to crash totally. I put the cover back on after confirming that all the heatsinks were in place and that the fan was working well. Then I turned the unit on set to a cable channel and fed the output to a monitor. This was in my basement which is cool and dry. I checked a couple days later and the monitor had a set of narrowly spaced vertical bars and the machine was locked up. It would respond to no remote or face plate buttons, except ON OFF. Turned it off then back on and the video was back. But, it went away again in about 3 minutes and the monitor was blank. Cycling power yet again the signal was back and then in a couple minutes the video did a freeze frame on a scene (!), the machine was locked and eventually the sound failed! Another power cycle and it came back.
So I wanted to know if the thing still migh record. Put in a DVD-RW and set it to record for 2 hours in SP. Came back a couple hours later and the machine seemed to be locked up in the STOPPING mode at the end of a recording. Got it finally to do a power cycle and looked at the DVD. Even though it had been at SP I have never seen anything like it. Anything on screen that moved became filled with huge pixels. Like when they disguise an area of a video that they don't want a viewer to see. When the scene was still the picture cleared up and was somewhat sharp. But only about 3 minutes made it on the DVD before the system apparently had crashed.
Of the four LVW-5006s I had each and everyone had common problems and a couple were just plain broke. I liked the menu system and the features of the unit, but the engineering is p*ss poor. This device is a piece of crap and I cannot believe LiteOn thinks they will get enough buyers to keep it and put up with the flaws. Many people won't see the flaws I've discovered if they don't thoroughly test the machiine. And why would you. You assume a machine is going to work close to the way it's advertised, right?
BTW, I've seen this same kind of change in industry with a seriously flawed Apex DVD recorder not being recalled (the clock gains ~ 2 minutes per week!) and also in a Samsung 20GB portable digital player. It seems many companies are doing much more shoddy engineering these days in these more difficult economic times, and they can't afford to bring the machines back and fix them right. I think we are facing a new era where we have to be even more careful that things work and then put these folks to the fire to have them be responsible.
Guess I better get off my soapbox, huh
In summary, if you can try hooking that 5006 up to a cable signal and just let it sit with a monitor on to see what happens. Don't leave the monitor on all the time, but check it every day or so to see what has happened. I'd be curious to know if your machine has the same issue as my 'last' one.
Cheers from north of Chicago.