Tesco Direct haven't really liked the 8320HD due to its very buggy nature - it was even the victim of an Tesco Emergency Product Recall briefly last year because its initial firmware was so bad, it couldn't even record programmes!
Earlier this year, it disappeared for a few weeks without any notice, only to come back at a lower and lower prices, ending up at a very reasonable £155 (delivered) for its final few months. However, that record low price was accompanied by the death knell phrasing "while stocks last" and sure enough today saw the last remaining units sold and Tesco Direct putting up their discontinued notice.
All is not quite lost, because you can still buy an 8320HD directly from FetchTV themselves, albeit for a significantly higher price of £189.50 delivered. What this does to the future of the 8320HD is uncertain - Tesco were surely selling a lot more 8320HD's than Fetch TV due to a cheaper price, bigger brand name and both offline and online distribution.
It does worry me that the gap between stable firmware releases has been getting longer over time, suggesting that FetchTV have scaled back on that front due to lack of either commitment or finances. They promised a new UI over a year ago and I'm sceptical their latest deadline of Summer 2011 will be met. All I'd like is fixes for the remote control repeat and FF/REW bugs and the addition of auto-padding. I'd be happy to see a further 3-6 months delay for the new UI if that happened.