XBMC will connect to the dreambox and download your boquets and give you control using the xbox pad, but i dont know about recording onto its HDD unless there is some way to mount the xbox drive for use with the dreambox, but then the xbox would need to be left on 24/7
I can't think of a reason it shouldn't work. Never tried it myself, but I guess you can share out the xbox's hd over the network, and browse for it and attach using a normal windows PC. If so, then you'll be able to do the same from the dreambox, just as if you were mounting a PC's shared folder.
Yes you can do it as I did it about a year ago when I was bored one day. I can't remember exactly how I did it but as I remember it wasn't that hard. I have now got a xbox 360 so I can't tell you how to do it.