My wife and I recently bought a TiVo Series2 for ourselves, as well as a second one as a gift for my parents. Both are set up to use WiFi as their connection to the TiVo home office. Both were a pain in the !#$#@ to set up for WiFi.
As you might expect, WiFi on the TiVo is a huge boon: not only can the TiVo download scheduling information without being connected to the phone, it can also communicate with PC's on your local network. TiVo provides a program that runs on your PC, TiVo desktop, that allows it to share MP3 files and pictures with the TiVo box itself. With that setup, you can play MP3's over your TV (or stereo) and browse digital pictures using your TiVo remote control. It's a wonderful, wonderful feature.
The dark cloud around this silver lining is the fact that the design of the TiVo box makes it difficult to find a WiFi adapater that actually works with the TiVo. There is no Ethernet port on the back of the TiVO, so you have to use a USB WiFi adapter to connecte it to the network. Maybe its the fact that TiVo runs Linux, but for whatever reason the TiVo is very, very picky about which WiFi adapters work and which don't. Fortunantly, they provide a list of supported adapters: read it (all of it), live it, love it. TiVo has also started selling their own adapter, which might be the simplest way to get started. It's not even all that expensive ($50).
The other thing to be aware of is that the TiVo boxes that are currently shipping (eg: both of the ones we bought in the last few months) are running TiVo OS version 5.x, and the WiFi adpaters we used weren't supported until version 7.2.1. I don't know why they're shipping TiVo's with OS's that are 2 major revisions out of date, but there it is: you need to update your brand new TiVo to get current WiFi support. To get the new update, you need to have your TiVo wired into the Phone as part of the initial startup. TiVo will download the OS update when it connects to the home office (you can explicitly ask it to connect, which seems to work for triggering the update). Once you get the updated firmware, you can set up the networking, axe the phone line, and bring your TiVo's connectivity out of the early-90's.
Once set up, WiFi seems to work very reliably: we haven't had any trouble. The only real remaining issue we're working through is that my wife uses a VPN to log into her work on the same PC we're using to run the TiVo desktop server. (Can you see where this is going?) Of course when the VPN is up it keeps the TiVo from seeing TiVo desktop and accesing our MP3 files. There are a couple approaches to solve this, but haven't done anything about it yet.
One more thing: the TiVo Series 3, announced today, has 10/100Base-T Ethernet on the back panel. Now there's a good reason not to pick the TiVo $300 "Lifetime of the box" service plan.