I have hooked up the VCR analog outputs to my TIVO, and tested by tuning to an FM radio station, the TIVO receives the audio no problems. However when I feed Optical digital input in to AUX1, it is not output on the VCR analog outputs. I couldn't find a configuration item affecting this. Is the 950 capable of doing this?

The 950's analog audio record outputs can only pass analog inputs, and the digital outputs can only pass digital inputs. If you are going to be recording a source with the analog outputs, you'll need to run analog cables from that source. You don't have to use those cables for regular listening (you can leave the digital input set as the input the 950 uses), but you need it to record.