Steven Kim at EngadgetHD has done a nice article on upgrading the internal drive in your TiVo HD using WinMFS. Some people prefer upgrading the internal drive over using the external My DVR Expander because it is one less box to have in the entertainment center, one less device to connect to power and cable to the TiVo, and one less device to potentially fail. Plus a bare SATA drive will generally cost less, and you can get a larger drive, such as 1TB. (Note that I use the My DVR Expander on my Series3, which hasn’t been upgraded, so I don’t think it is a bad solution or anything.)
Note that if you do upgrade the internal drive, you lose the ability to just plug-in an external eSATA drive for additional capacity. You can still add an external eSATA drive, but you want to image and ‘marry’ the two drives simultaneously and install them in the TiVo at the same time. And if if you disconnect the external drive it doesn’t recover like it will with the standard eSATA support.