A few things not being discussed here are the codecs and bit rates. Different vendors have different codecs and different codecs have different profile and bit rates.
Yes. Most DVRs digitize the NTSC signal at 704x480(240) at D1(2CIF) resolution. so you will lose horizontal 36 pixels here each line.
But then the codec and bit rate given for the codec make the whole difference. Some DVRs call it recording quality/level, compression quality/level or bit rate (in kbps). Different codec chips have different max bit rate at a certain profile.
Some DVRs have max bit rate of 2048Kbps for D1 at 30 images per second in H.264 Base Profile. In this case, you really do not want to go more than 480TVL, because you will be hardly able to tell the difference between 480TVL vs 700TVL.
Everything is a trade off. When you increase the bit rate, the fidelity will be better in the recorded video. However, it will eat up your HDD that much faster.
Another thing is Higher TVL sensors have less sensitivity. The image sensor pixel size has to be smaller if you have to have more pixels in 1/3" real estate area.
all Sony Super HADII
ICX632BKA 1/3" NTSC 510 x 492 3,800mV CXD1257A
ICX638BKA 1/3" NTSC 768 x 494 2,250mV CXD1265R
ICX662AKA 1/3" NTSC 976 x 494 1,600mV
I always advise people to use the right angle. If the objects you want to record are big enough on the video, then you do not have to have 700TVL cameras.