Got an aerial guy to come and fit a decent wide-band aerial, which made all the difference. MythTV automatically scanned for and found loads of free TV channels - Woo!
Now I can do picture in picture as well as recording 2 channels at once or watching one channel while recording another.
It's not quite clear how it chooses which tuner to use and the <C> key doesn't switch between them as I expected it to.
It's still way cool though and the quality of the Freeview programs is substantially better. The tuner card just saves the demultiplexed M-PEG stream straight to the hard disk rather than re-encoding the video that's already been decoded by the NTL Cable box.
The only other problem so far is that I can't play back the Freeview video files on a PC using MythTV Filters. Guess I'll have to do a little codec research.