I don’t really know what misconceptions you’re speaking of. Nobody made any judgments about you that I could see.
The Live Hub is marketed exactly as what it is, a media streaming and storage device, not a recorder. Yes, with proper software on your PC you can convert DVDs to a format that will stream to or from the Live Hub. These can be DVDs you own or ones you rent from Netflix or Blockbuster. You can also stream movies directly from Netflix and Blockbuster over the internet via the Live Hub, but you can not save them to the hard drive. Netflix has a limited number of movies you can watch this way, but they are free with your monthly service fee. Blockbuster only offers them as On Demand and you have to pay extra for them, but they have a much better selection and more titles. The other advantage of the Live Hub is it allows you to stream and store other media, like your personal videos, your digital photos, your music collection, etc along with access to YouTube, Pandora and other internet streaming websites. No other device offers this kind of flexibility. If you bought the Live Hub as a standalone device expecting to record from a cable feed or other input, you bought the wrong device. For half the price you could have gotten a WD TV Live Plus that would give you the same access to internet streaming sites and Netflix and Blockbuster, but without the 1tb hard drive, which it sounds like you don’t need since you don’t have connection to a local PC.
What you’re not understanding here is that no device simply allows you to record copyrighted material like movies and TV shows because of concerns for pirating. A DVR is a device your cable company rents to you, but you have to pay a monthly subscription fee in order to get the content to record. The cable company in turn pays part of that fee to the networks for providing them with their content. It isn’t just freely available. If the Live Hub had recording capabilities it would be a lot more expensive as they would have to pay royalties to all the content providers that could be accessed with the device. Netflix and Blockbuster have agreements with WD for streaming only because, as I said earlier, you are only renting the content momentarily. If the Live Hub could record then you would actually end up owning the content and the big studios would not be happy with that.