I also bought the 1Tb (Shaw) WD PVR Expander yesterday hoping it will work on my DCT6416 III. Unfortunately, it didn't. It looks like the PVR can see it but for some reason can't use it -- I went to diagnotic mode (pressed OFF then press OK/SELECT). Option d13 shows that I have 2 HDDs, the internal 160Gb and an external 1000Gb. But that's all 6416 can tell about the expander.
I phoned DC and the lady that I talked to said that I need to format the expander before it can be used on the DCT but won't tell me how to format it saying that they don't really support it. I did the REPEAT/LIST (3x)/LIVE but it formatted the internal HDD (I got mad at this because I have some recordings on it when it was reformatted. Now I have to DL those recordings off the internet.)
Anyways, I have another PVR, the Pace Tahoe box. Before I return the expander to Bestbuy, I thought to try it first on the second PVR. So I unplugged the Tahoe, connected the expander to the box using the supplied eSATA cable, plugged in the expander then plugged in the box. Voila! The box asked me if I wanted to format the expander. I selected YES and it got formatted. Before all this, my Tahoe shows that I've used up 85% of the storage. After attaching and formatting the expander it now shows 5% used. Awesome! So, it works on the Pace Tahoe but not on the Mot DCT6416 III.
Just now I thought, since the expander is now formatted, will it still work if I transfer it to the DCT? Hmm... I will try it when I get home tonight and report back here with the result.