jtaunton
Its is the modulation system that is digital, the transmission of Sky and Freeview is always analogue. However you pass it onto the TV, Sky and Freeview are always 'digital' (Its all a matter of definition really - if I could think of a suitable analogy, I'd use it, as I can see even as I write this that I am not explaining it well)
Your Sky or Freeview boxes convert the received signal into two forms. A baseband (raw data for controlling the TV) signal and a remodulated RF signal for use on tellies with no SCART input. The baseband signal is available through the SCART sockets, and the RF through the RF socket. The SCART signal is better, because the signal stays in 'TV language' rather than having to go through the processes of being remodulated into and demodulated from RF.
I think that the difference between your set-up and Mick's is that your VCR has a SCART input and output, whereas his just has an output. That's why he will have to use Sky's RF output to then input to the VCR.