I don't know about this one specifically but most of these package deals come with crap cameras. If it gets the least bit dark you have to depend on the infrared and then you only get a small area of illumination in the center of its field of view.

The cameras aside, this DVR is a pos. MJPEG is absolutely unacceptable unless one enjoys squinting at the screen in front of them.
Problem with mjpeg is the default frame size is about 300x 240. Can you imagine that on a lcd monitor or even crt? And if you expand it the pixelation is so bad you cant make out anything at all.

It may seem like a good deal but believe me you will not be happy with the performance.

If you are in the market for one look for mpeg4 or h264 dvrs.

#2 is correct. I have tried one like this and sold it to some poor smuck on Ebay. Bought an H.264 model and it works much better. Wound up buying new cameras too.