genie replacement

Regular Genie (HR34, HR44, HR54 or revised HR54R1) work with regular receivers. The Genie-2 (HS17) is the one that forbids them.

I take the "XTV DVR" is an external DVR unit and not a DirecTV receiver DVR?

DTV DVRs don't have a volume control they only supply a line output so whatever is muting the sound is not the DTV receiver.  Have you tried swapping the "bad" one with another to see if it is really bad?

The HR54 Genie will work with any DTV receivers but the HS17 Genie2 will not allow anything on the account but minis.

The HR54 Genie will work with any DTV receivers

Well only any of his, not all in existance.

Genie will work with HD non-DVR receivers (H21 thru H25), regular HDDVR (HR20 thru HR24, and special R22).

H20 and THR22 do not work with the Genie. And naturally neither do any MPEG-2/SD-only receivers which are on the way out.

ATT on line had my equipment listed as an xtv. I corrected post to an HR 21-700 DVR. 

The THR22 and H20 will not do Whole Home but still work with an HR54 Genie.

They can exist on the cabling with the HR54 but cannot work with it (i.e. Whole Home DVR). Sorry that is what I meant by "work with". The same applies to anyone who still has a working D12 (SWM compatible, but not MRV).

So essentially would lose function of second recorder, correct?

If you replace any of your HDDVRs with a Genie, then you get a bigger capable HDDVR. All your models work with the Genie.

HR21: 2 tuners, 320GB recording space.

HR24: 2 tuners, 500GB recording space.

Genie: 5 tuners, 1TB recording space, Picture in Picture (PiP).

You also get Whole Home DVR ($3) if you don't already have it. This allows all HDDVRs to watch what is recorded on any of the others.

Just do NOT replace any boxes with a Mini Genie Client or you lose capability.

A stand alone receiver still records and plays the programs just only on that TV.