Sorry I missed that one - Did anyone ask about the legality of mashing up TV reception like they do?

Yeah, there was quite a bit of discussion about the legality of it all. There isn't any defined precedent yet - the nearest cases they've found are some service in Germany that replaced adverts and sex scenes with a blue screen, which was ruled to be legal; and there's a similar service that can replace the adverts on hoardings at football stadia with different ads in the TV footage of the game, but that's operated by the TV companies (and used a lot in France to replace tobacco ads) so hasn't really been challenged.

One thing Half Minute Media have been careful to do with their system is to have a physical switch to a different channel, rather than splicing their adverts into the TV stream. So they aren't altering Sky's (for example) content but just turning over to a different channel.