Yes, your understanding is correct.
HDV is a highly compressed long GOP format that requires all sorts of magic and voodoo simply to be edited. Your tape machine expects incoming video streams to be conformed to that long GOP format. If it is not, it will not recognize it as a valid video signal.
The only way to view a HDV video signal in real time to a HD monitor is through a 3rd party card/external device that was designed to do that conversion in real time.
[/rant on] HDV is one of the biggest jokes played on consumers in the video game. Unfortunately, it was only the opening gambit in a wholesale deluge of nonsensical proprietary consumer recording codecs not designed for editing. [/rant off]
Having said that, if you have FCP v6, DVCProHD material downconverts and plays quite willingly without anything more complex than your standard DV monitoring solution (as long as the framerate of the material matches that of the monitor). I believe this can work with ProRes HD material as well. Haven't tried it.
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