OK, so I'm not so bright. This is for the next person who may have the problem I had. As I said the connections are correct. The thing is, when the Outlaw is set to Video 1 mode no signal is sent out to the VCR. But that does not mean you cannot record. Leave it in Video 2 setting and record. Video 1 is for playback only. What was messing me up was I expected to be watching a program on Video 1 and recording it there as well since the "Rec Out" is bundled with Video 1 (which is where the VCR plugs in)and when I was not getting a signal to view I thought something was wrong. Anyway everything works great and I am very happy
So the moral of the story is when all else fails just keep pushin' buttons, somethings bound to happen. So again, record on Video 2, playback on Video 1.