MickeS
Yes - I have the HMO

and also 4.0
I have been told that 4.0 did indeed enable Serial Control for cable boxes. I have yet to try it out - but will do so this weekend at the latest (if not tonight) and let you know how it goes.
I agree that the HMO is a tad bit overpriced...but be sure to keep in mind that the HMO is now always "on" or "tied" to that particular machine.
Meaning, should you ever decide to sell your Series 2 TiVo(s)down the road (I'm always selling stuff) you should be able to get $99 more out of the main HMO'd TiVo and $49 out of each subsequent TiVo you sell (if those had the HMO option as well).
That's how I'm looking at it anyway...may not totally make since...but I figured what the heck...
So far, I'm very impressed with how well this all works. I have 1 TiVo in my Home Theater room and 1 in our bedroom. It is great to be able to grab shows from whichever one I'm not using/watching at that particular moment and transfer it to the one I am watching at the present time.
I also have a HTPC - so the music and photos are somewhat not that important to me really - as I already have this function on the HTPC covered. But I will admit - The TiVo Photo's and Music "dealie" is pretty slick and very easy to use.
I highly reccommend the HMO option if you have a Series 2 TiVo. At least give it a try - 30 days money back guarantee.
Good luck getting 4.0 !