I don't know if your problem is solved by now. Here is a solution I have come across.
I got a Tech-Com TV tuner recently and I too had a similar problem. I browsed in the net and came across this solution. But, since my OS is Windows Vista, finally I got it exchanged with Rolf TV Stick - MRon TV Tuner.
Hope this attachment helps you. I am sorry, I am unable to fix the attachment here.
Question: Honestech TVR shows “Could not initialize the capture device”.
Step1. Please click “Property Settings” icon on TV panel.
Step2. Please choose “Video Setting” and apply following setting:
Playback Device: Speakers
Recording Device: Line In
Playback: Master Volume
Recording: Master Volume