There are a couple more alternatives that are being missed in the very useful debate.
The first is broadband TV / IPTV and the second is free sat (the BBC and ITV initiative for HD content).
I think if the guys in Oz can get the volumes of the STB's up, as they use the same TV standards as us (much closer then the US for instance) then there is a possibility of a premium market in the UK with the early adoptor tech heads. I'd buy another one without a second thought, Sky and Virgins offerings are still pants.
The problem about the UK is its not Europe and without a strategy to do Europe (much harder than multiple states in the USA) then it is going to be hard to see it happen, unless its on the back of a UK service provider.
I have been using Apple TV for a while and the you tube funcitionality is very good, with the iminent arrival of content in the UK iTune store I think the model for TiVo is to find a triple play broadband provider, like Carphone Warehouse, and then leverage the delivery and PPV/VoD with Amazon.
I'm sure its not dead, not yet, just TiVo made it much harder as they failed to market Series 1 to the UK the first time around.