I set up my slingbox 500 and can still watch my CanaDigital satellite channels and I can change satellite channels with the virtual remote when I log into the slingbox from my PC.
If I click "watch" when logged in on my PC I see the TV screen picture on the PC for a second, then the TV turns black and after a short while I get a message saying that my TV is not copy protected.
I only have a HDMI cable between the slingbox 500 and the satellite box since the satellite box has no connectors for the audio and component cables.
When setting up the slingbox I get a message recommending also connectin and configuring the component cable connection.
Is it an encryption of the CanalDigital signal that I have to get around? Any adaptor I can buy that solves it?
Yes, this is content protection that your satellite provider has put in place. Here is an article that will give you more information on the subject:
Hope this helps!!