UPDATE: 1/07/04
From San Francisco Chronicle:

Would-be couch potatoes who complained they were victims of a bait- and-switch routine by Santa Clara's ReplayTV should now get some satisfaction.
After weeks of confusion, ReplayTV now says it will honor a deal for three years of free service with the $149 model of its digital video recorder, even though the free service was offered by mistake.
The stumble occurred when the company, which was bought last year by conglomerate D&M Holdings U.S. Inc., slashed the price of the low-end model of its system for recording TV programs to $149 from $499 on Dec. 16.
The previous price included three years of the television listing service needed to make the recorder work. The company says customers who paid the new, lower price were instead to be charged $12.95 a month for the service.
Unfortunately, the company says, some retailers didn't get that message, and boxes bearing stickers promising three years of free service were sold for $149. ReplayTV's call centers also told some customers they were entitled to three years of service.
"For those consumers who were confused by these mistakes, the company will provide three years of free service," the company said in a statement released late Monday.
When the company abruptly stopped service to many newly activated ReplayTV sets, an outcry arose on Internet message boards devoted to the product. Some people were stunned when they heard the company wanted an additional $299 or $12.95 a month to reactivate the product; others said they knew the deal sounded too good to be true all along.
Brian Crosby, a partner with San Francisco Web design firm Get Up, bought one of the DVRs for himself and one for his father as a Christmas present on Dec. 17, after hearing about the deal on a Web site. A few days after Christmas, his father called to say the device had stopped working.
Crosby called the company's customer service representatives several times and never received the same answer twice. One representative said his service would be restored; another said he would have to pay more first.
"You could just tell the people you talked to couldn't tell you one day to the next what was going on. ... It just seems crazy that they've put everyone through such a wringer," said Crosby, who is now looking forward to having his service restored.
To get their ReplayTVs back online, customers will have to call the company's customer service line and provide their serial number, which ReplayTV will use to trace which retailer sold the particular box.
If customers have the receipt, as well as the date and place of purchase, that would help expedite the matter, said spokeswoman Sara Trujillo.
"ReplayTV will work with customers to verify mistakenly labeled product by retailer and date of purchase through product serial numbers and receipts. ReplayTV will use its call center records to identify those customers who contacted the call center and received incorrect information," the company statement said.
Trujillo would not say which retailers sold the product with the incorrect offer, but customers told The Chronicle they were available at Circuit City and Magnolia Audio Video. The Associated Press reported that amazon.com also advertised the deal.
Because customers were just hearing about ReplayTV's decision Tuesday, it was too soon to say whether buyers had any trouble getting their sets reactivated.
Dan Wright of Redwood City got his set reactivated Sunday after asking for the company's policy in writing in order to complain to the Santa Clara County district attorney.
"They didn't have a choice," Wright said of the new policy. "They clearly wanted to do something that wasn't legal, and they don't get to do that."
Consumer advocate Doug Heller of Santa Monica's Foundation for Taxpayer & Consumer Rights said ReplayTV's actions were "exactly the kind of behavior that reminds us how important it is that we protect consumers' ability to go after businesses that have unfair and deceptive practices."
Trujillo said she didn't know of any lawsuits filed against the company over the offer, but she did say the company is aware that customers are angry.
ReplayTV's decision came not because of legal pressure but because "they want to have happy customers, satisfied customers," she said.

The company is aware that after a December 16, 2003 price change on the ReplayTV 5500 Series DVRs, some retail outlets sold products that were mistakenly labeled on the outside of the box to indicate that 3 years of service was included in the price of the product. In addition, in a few cases, the company's call center inadvertently told some customers that the new price did include 3 years of service. For those customers who were confused by these mistakes, the company will provide three years of free service. ReplayTV will work with customers to verify mistakenly labeled product by retailer and date of purchase through product serial numbers and receipts. ReplayTV will use its call center records to identify those customers who contacted the call center and received incorrect information.

ReplayTV regrets any pricing confusion that resulted from labeling inconsistencies during the holiday season.

If you go to ReplayTV it says that all of their DVRs come with 3 free years service. It is also mentioned in the features of the one available at amazon.com.

Does anyone know why these are suddenly so cheap? I wouldn't want to buy one, and then find out that ReplayTV is going out of business. We would be left of 3 years of non-existent service.

replaytv was just bought by huge company so think they will be around for awhile
same company as denon

It seems Replay has again changed their business model. The 3 year activation is no longer included. New subscription rates are $9.95 a month or $299 lifetime, to match Tivo. Circuit City, buy.com or Amazon all have this new pricing scheme. Yesterday, buy.com had the reference to 3 year activation in a link, but the link was removed.

I knew this was too good to be true and I am in the market for a DVR as well...

What's funny is the ReplayTV site still has their original pricing for the DVR's.

Are these hackable?

this is very hot.

i have 2 5040s. if you already have a replay, order one. if not, order two.

this could be a price mistake or supply and demand.

Anyone pull the trigger yet?

Replaytv.com shows three years of service included in all their models. I think this is correct. However, remeber that after the three years you have to pay $.99/month. I would really love to pick one of these up but I had a bad experience with Tivo vidoe quality on a 57" bigscreen. Anyone have any experience with the ReplayTV video quality?