Nuvico DVR's use MPEG4 compression. If set up correctly they give you a good balance between file size & quality of picture. They are "inexpensive" compared to a DM, GE etc. but pack a lot of features for the price.
As far as HD failures most manufactures are beginning the switch to the new seagate HD specifically made for 24/7 use. These carry 5yr warrenties & will really use stablize every manufacturers hd issues.
Beth