We dropped cable completely last fall. Our internet is via ADSL on our phone line because we're close enough to an exchange that can provide high-speed (8 Mb/s) service. We built a small computer dedicated to internet TV downloads / displays, based on an AMD chip, 2GB RAM, Win XP Pro OS, low-power components in a low-profile case allowing small quiet fans, and a fanless XFX video card based on the ATI 4250 chip. It has a S-Video output we convert to a simple NTSC Composite video with an adapter (plus stereo audio) for feeding into our older VCR / TV setup. My son chose and set up the software in three components. Microtorrent is the downloader (the "micro" part is written as the Greek letter mu, looks like u), TED is the download control system that you program with which TV programs and episodes (or whole series) that you want it to find for you, and Boxie is the player that lets you choose and play any program on the hard drive. We installed two 1.5 TB hard drives, and so far the first one is getting close to full with hundreds of hours of all our favorite shows. It really has become our entertainment center, not a TV, because we have total control of what we watch when. And NO commercials, which is enjoyable and saves a lot of time.
At the same time I installed a reasonably good broad-band exterior type of TV antenna, but put it in our attic. I connected to it an impedance-matching transformer to go from 300 ohm (twin lead output on an antenna) to 75 ohm standard coax TV cable, then a small booster amp of 10 dB to boost the signal before sending it down the cable and through a couple of stages of splitters we already had installed. So that antenna supplies several TV's in the house with local OTA stuff. It's kinda weird watching that, though - they keep breaking up the programs with commercials!
One thing you have to get used to - you do NOT see anything "live" this way, at least not usually. You get to see programs a couple days or more after they air. So for sports fans, this may not be the best. During the recent Winter Olympics one of the networks did live streaming on the internet of most coverage, so we watched that way just using the browser on the computer. But not many networks live-stream their major programs.