OK, deep breath, here goes. Without realising I have been playing and decoding recorded items. When listing archived items, prior to playing there is a column, which may or may not contain a $ sign, this is the Scrambled Item. If the $ is green then it has been descrambled as recorded, if Yellow it is recorded scrambled, if half and half then both. Now if recording live a scrambled channel then there is no picture (just a blank screen) except that if (like me) you use subtitles then the subtitles are displayed. If you record delayed than you have no way of telling if it is scrambled or not until you select Archive at a later date and read the $ information.
As regards PIP, you cannot Pip 2 scrambled channels at the same time. Though,of course you could PIP, say, BBC1 and Channel Five say.
Hope that answers the questions.
I would like to add that up to press I have found this Topfield TF5010PVR great, and would strongly recommend it.
Edit: just reread the original question, I do not know if one can use two Cams at the same time, though as there are 2 slots I asume so. If someone likes to give me a Dragon cam I will let you know! ;)