If you can find the specs on your DSR, I'd like to see that. Yea, you have to enter everything in manually. On my receiver, you can save 3 settings. A/B and C. So, i use that for the 3 most common channels i watch. Otherwise, its not that big of a deal, i enter in the frequency, the VCT number and the channel #. There is NO blind scan. Some models make it easier to find the active VCT's and active channel numbers.. My model does not have that option. I do know from another fellow that the DSR-4410 does have that auto ability.
As for slaving you were right on. That's exactly how i am setup. I have the DSR hooked on the LOOP out of my primary receiver. I move to the satellite of the DCII channel i want, and i select a matching Horizontal/Vertical channel on the primary receiver. So, if the channel i want on DCII is vertical, i need to turn to a vertical channel on the primary receiver. I then enter the settings in the DCII and it will show a green light when its got the channel and wala. and yes, the DC block is between the loop out of the primary receiver, and the DSR. - My model didn't like turning on when their was any DC current.
The BNC is only for video. The audio is those cut off wires on the picture of your ebay listing. You just need a small flat head screw driver to put in new wires. You cut off one end of left channel right channel RCA cables and wire them into the DSR and plug the other end (RCA) into your left right channels of your receiver/tv.
You could also buy something like this if you don't want to cut up an RCA cable :
http://www.ebay.com/itm/222139854208?_trksid=p2057872.m2749.l2649&ssPageName=STRK:MEBIDX:IT
Yea, the newer DCII receivers handle MPEG4 HD channels, and are A LOT more expensive.