Cutting the cable, lets talk options and media setups
FYI - I've had a home theater PC (HTPC), running windows 7 and windows media center for about 4 years with no cable. I get over the air TV with an antenna, and then have plugins for netflix, hulu and amazon streaming.
It works pretty well, but still requires tweaking... at the moment I'm dealing with some issue where streaming flash video (for example from ABC.com) is pretty poor... my other computers don't have the issue, just my HTPC... it probably has to do with my codecs installed.
The biggest complaint as has been noted is not many legal options for live sports.