Yes you will be able to watch any freeview channel available via your TV whilst recording from the DVD/HD recorder.
I think some freeview recorders with twin tuners will allow you to record two channels whilst watching another via you TV.
I prefer to burn to DVD-r/+r disks as I found DVD-RW disk not as reliable.
Its difficult to recommend a DVD/HD recorder as it tend to be more of personal choice and how easy it is to use. I went for the Sony RDR-HXD790 as I found it very easy to remove the adverts before burning to DVD.