Well Arvoyea, I think actually all you need on your tv is one input for your game system (eg: ps2, xbox) and one output, to connect from your tv to the dazzle video capturing device.
Oh, if you're asking about whether having two inputs is different from having one input and one output, i think it is cuz the output is so the video/audio gets transferred to your comp, if you had two inputs then you'll be basically sending your comp screen to the tv (which doesnt work with dazzle cuz i tried xD) and the game to your tv. Although im sure if you have multiple sets on your tv, then chances are one is for input and the other is for output, most tv's like that have one input and a bunch of outputs.