Welcome.
You can do either (or both). Obviously the PAL tuner is for analog VHF/UHF broadcasts. The paytv (or FTA) box plugs in to the AV inputs on the back of the TiVo without any hardware modifications. You can add a second set of audio inputs so that you can plug one box into the svideo input, and one into the composite input, so you can have FTA + paytv.
Note that what ever configuration you use, the TiVo can only record from one at a time.
Of course you will need to reimage the TiVo HDD with an OzTiVo image CD on your computer.
Where are you located?
Plenty of info on www.oztivo.net
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