It does really, really well with about an (pulling a number out of the air) 80% success rate.  Long commercials (like the drug ones) it sees as programming and doesn't advance past it. And sometimes the start of the program doesn't have quite long enough of a blank screen.  Still, a pretty nifty little (big) feature.

The advance feature is a separate feature from fast forward.  Advancing takes you 30 seconds ahead, reversing takes you 10 seconds back, so if the DVR doesn't position the program accurately it's incredibly easy to do it yourself.  

I'm very happy with the ReplayTV.  Naturally...

ReplayTV ended up filing for bankruptcy in 2003 after fighting a copyright infringement suit over the ReplayTV's ability to skip commercials.

Plus newer models could no longer have the feature.

Legal Battle
On October 31, 2001, numerous TV companies, including the three major networks, filed a lawsuit against Sonicblue, which at the time marketed the ReplayTV device. They alleged that the ReplayTV 4000 series, was part of an "unlawful scheme" that "attacks the fundamental economic underpinnings of free television and basic nonbroadcast services" according to the lawsuit.

The TV industry attacked ReplayTV for two reasons:

1.The machines enabled people to record television programs and then watch them without commercials via the "AutoSkip" feature, thereby tempting advertisers to pull the plug on what the lawsuit calls "the lifeblood of most television channels": advertising.
2.The machines allowed users to share programs they've recorded with others via the "Send Show" feature, which transmits digital copies of shows over the Internet to other ReplayTV owners, thereby enabling people who have not paid for premium channels to watch premium content for free.

The Act had some principle goals behind it, which I would classify as having not come to fruiting. The biggest was to increase competition among residential voice and video providers. I believe it officially classified high speed internet access as a non-common carrier service, but that could have come a few years later via FCC ruling or additional legislation.

It was certainly successful in encouraging various companies build out infrastructure, and bring broadband access to the home. It's biggest mistake was opening up the long distance market to the regional bell operating companies. PacBell was already in the process of overbuilding cable TV operators in California when the Act became law. Other RBOC's had video plans in various stages of development. Still, video was always the red haired step child within any phone company.

When the Act let RBOCs get into the long distance business, video plans got put on indefinite hold. The Clinton administration didn't put up any argument against RBOC consolidation, and that's why there are 4 telephone companies with > 90% market share today. When SBC acquired PacBell, they stopped all broadband build out, in many cases forfeiting down payments for franchise licenses.

RBOCs also got very lazy about rolling out high speed data. My home state of PA has extended DSL coverage goals for Verizon (originally Bell of PA and then Bell Atlantic) god knows how many times. Meanwhile, they continued to enjoy tax and revenue benefits for planned service expansions they obviously had no intention of honoring.

It would be 10 years before fiber to the home became a cost effective reality, and phone companies became serious about offering video services at any significant scale.

On the plus side, there were a large number of jobs created in the telecom equipment business, and more on the services side. Funding was made available for startups, massive cable system upgrades, and fiber construction.