1. You are correct that the 688 has 4 HARD activity buttons and the rest have 3, but all have a More Activities button that allows you to scroll through a virtually unlimited number of activities in the LCD screen.
2. I am one of those who use a 659 perfectly well with a DVR - the SA8300HD. I use the LCD screen to house the A, B, and C buttons (used for choice confirmation, guide functions, etc.), as well as the PageUp and PageDn buttons for browsing the guide. I have the Live and List buttons mapped on either side of the '0' number key. With all the remotes being the same inside, it comes down to button layout and figuring out which would be most intuitive for the way you are used to controlling your equipment.
I'm sure you've already come across it when reading other threads, but here is a link to a great image that allows you to see all the buttons on each of the models: