It seems to me that you are not getting RGB out of the sky box passing through to your TV. Ensure the Sky box is set to output RGB in the setup menu for scart and connect the scart to TV out no VCR as that does not pass RGB (had a similar setup and was miffed at the recording quality as well till I did this). Then ensure that your Dvd recorder is set to output RGB via the scart and then ensure that you have the scart cable connected to the correct scart socket on your Tv as not all scart inputs accept RGB. Failure to ensure RGB passthru will result in a composite signal full of noise. Obviously you will only be able to watch live Sky via the DVD recorderswitched on but for archive purposes I'm sure it is worth the hassle.
No regards scart cables. Some very old ones wont allow RGB but there is no need to spend much just ensure the cable states RGB compatible on the box higher quality ones do have some effect but a decent low cost Techlink works as well as anything.
I had a setup like this a several years ago so not sure if it still applies but SKY2 would not record due to copy protection and I couldnt be bothered buying a macrovison stripper. Not sure if Sky still do this with some channels or programs which I gather was down to the Production companies of some of the programs.
Paul
Onkyo 875, Monitor Audio RX6 GW,Monitor audio RX centre GW,Monitor Audio BFX rears, REL QUAKE,Arcam CD73t CD ,Russ Andrews Yello mains cabling & PBJ interconnects,Sterling Black Mamba speaker cable.