wmcbrine, Cable pricing is highly regional. I moved from NY to NC a year ago and my cable bill went up about $40/month just on the basic digital service. There is not much else available where I'm located, and they know that.
To the OP, have you looked at DISH and DirecTV? If you are in a valley, you may not be able to get line of site on the satellites.
For Over the Air HD, have you checked http://www.antennaweb.org/aw/welcome.aspx
with your address to be sure that you can't get a signal. RF can move over and around things where satellite signals require direct line of site. You may be surprised that with the right antenna you might be able to get something. I can get about 10 HD signals where I'm at.
If you want to try doing things over the internet, you should look into Boxee. Boxee is an open source media aggregator application that will run on many platforms. Starting next month, they will be selling their own hardware, or today you can get a Roku for about $100 that will get it. Boxee can bring you a variety of thins. You can install Boxee for free on your computer to play with and see what you can get... runs on Mac, Windows, Linux, and AppleTV. I just bought a used AppleTV for $150 to run Boxee on. Note that much of the content on Boxee is not HD. But it does get Hulu, Joist, justin.tv, and other more common stuff like BBC, CNN, CBS, Comedy Central although those are not the same thing you'd get by tuning into the channels on cable. I am very interested in it because MLB.tv is available on Boxee, and I was pretty disappointed with Time Warner and MLB Extra Innings last season.
So with a Tivo HD, you could get over the air HD signals for free, and Netflix instant watch for their lowest subscription fee that is less than $10/month (plus the Tivo subscription unless you buy a lifetime service). That is all very high quality. With a Boxee setup, you could get a lot of internet content... not the greatest quality, but not horrible. I am experimenting with this right now, but I fear that if a lot more channels don't start offering direct offerings that I won't be able to do it. We watch a lot of stuff on the cable channels mostly... History, Discover, NatGeo, TNT, Spike, etc. Discover and NatGeo have channels on Boxee, but its not full programming at this point. Maybe one day those guys will realize that they can make plenty of money going direct too. The big, big, one is ESPN. ESPN is the highest cost service cable companies pay for and I think they could easily charge more to folks to go direct if they wanted. I'm hoping they will follow MLB's lead and provide a service on Boxee. That said, a lot of sports are streamed live on justin.tv, but its live. None of the DVRs that I'm aware of can time shift live internet streams. That is why a service like MLB.tv is so nice. You can join any game in progress and start anywhere in the game, and then all the games are archived 90 minutes after... even blackouts.