OK, after a LOT of work, the picture/signal issue appears to be fixed

. I'll probably never know what the root cause was, but I think it was the video card (the fanless Gigabyte 6600GT) with the sequencing of its installation.
I'm not out of the woods yet

, as my signal disappears when I configure Media Centre to use the two capture cards (works fine with one). I'll continue to troubleshoot this.
I think what fixed it was that I ripped the gigabyte card out and one Dvico card, reinstalled MCE2005, used the onboard video and tested the picture. It worked. I then put the other video card back in and it still worked. I also removed one of the DVico cards when I was setting up the signal. I installed the second DVico card after verifying everything worked in MCE 2005.
Where did I go wrong? I think it was dropping everything into the box first up, and hoping the install would work (read impatience). I should have done things in a staged, methodical manner instead. My install procedure further on was how I should have done this from the start, which would have saved me many, many hours of troubleshooting.
So for any newbie out there trying this for the first time, here's what I've learned (and trust me, you'll spare yourself hours of heartache if you try this install procedure first).
1. Before you do the install, get the latest video, nic drivers etc from the various websites. If you have video onboard your motherboard, use it for the install, and don't install any card-based video cards yet.
2. Install MCE 2005
3. After the MCE 2005 install, ensure you're connected to the web, go the web for Automatic Updates, install the critical and optional updates (ensure you install the MCE Rollup which includes the High Def update)
4. Install the latest drivers for everything
5. If you're running a DVico card, install the RC1 software off the DVico website
6. Start the DVico app (after a reboot), scan the channels, and ensure you can get a picture via your onboard video card. If you can't get a picture via the DVico software, MCE won't work
7. Create a System Restore point (Start, Programs, Accessories, System Tools, System Restore, Create a Restore Point). You need to do this as the installation of the video drivers for your video card can stuff all your good work thus far. I used this when I used one of the three versions of the Gigabyte video card driver that caused shocking shuttering on the picture. An older version of the driver fixed this issue (go figure). If I hadn't done the restore point, backing out the later driver cleanly would have been difficult
8. Shutdown, install the video card (if applicable)
9. Startup, let MCE detect the card, and install the driver for your video card from the download in step 1
10. Test the picture signal again in the DVico app, and ensure it still works
11. Restart and boot into safe mode (pressing F8 on startup). Install the custom psisdecd.dll from the downloads section of this site so you can get all Australian channels (I'm in Brisbane and I didn't get SBS without the patch). Note you have to reboot in safe mode to ensure this works. Do a search on the forums for the filename for detailed instructions on how to do this
12. If all is still well, ensure you have at least a 32-bit, 800x600 res display set, go into Media Centre and go through the setup wizard
13. Scan the channels when prompted, and ensure you get all the channels you expect
14. Ensure you can see picture via MCE in Live TV
15. Install EPGRunner or equivalent to get the Electronic Programming Guide (note you need the .NET framework v1.1 installed to get this to work)
16. As the security updates stuffs the auto-login, search the forum for the post on this site for the control userpasswords2 command. This will enable you to auto-logon
17. I also set a password for the user so I can use remote control (Start, Settings, Control Panel, System, Remote tab) so I can do stuff to my MCE machine remotely. I entered this password in step 16 to set the autologon