I can personally confirm that the series 3 tivo disables most of its features once the subscription has been cancelled.

I had heard that earlier models would allow continued functionality, so I gave it a go. (My local Costco has an unlimited return policy, so I had nothing to lose.)  Right before the 60-day free trial period was up, I called tivo to cancel the service.  I even set my firewall to block outside internet access so the tivo box wouldn't know.

After 2 weeks, the box started warning me that the program guide was out of programs, but continued to function as normal.  After 30 days, the box reported that the subscription was no longer in good standing, and would no longer allow recording of programs (even manual ones, or those by pressing the "record" button).  Access to my computer was also completely cutoff and I no longer could see or transfer files in either direction with my pc.  Worse, every time I would change channels I would get a full-screen message that would last some seconds telling me that there was no subscription.  The box WOULD allow me to pause and rewind live tv, but that is about all it would allow.

Another thing I discovered... After a power failure some days after the tivo box stopped working for me, the software/firmware appeared to have been reset back to the one that came with the box.  For the software upgrade (which includes tivo2go, for example), a subscription would also be required.

 I continue to search for a DVR that functions like my VCR.  I want a box that will record programs (HD please) that I tell it to (i.e. Monday, 8pm, channel XXX-X), allows me to xfer to/from a pc, and absolutely MUST NOT have any monthly subscription or program guide.