I have a bit of experience in this area - I've run mythtv with a PCI tv tuner card[1], boxee (the downloaded version, not the boxee box), and now have two appletv2s w/xbmc. I've had cable tv only intermittently for the last seven years or so.
The first order of business is "Wife Approval Factor", or WAF for short. Feel free to substitute Girlfriend, Boyfriend, Husband, or Sidekick in as necessary. If it's a giant pain to use[2], then it won't be long for this world or your living room. This has gotten better over the last few years, but there is still "nerd usable" vs "real person usable" problems. If your SO is not comfortable learning new UIs, and wants things to Just Work, *and* (crucially) wants to watch sportsball with you, then you're better off with cable. I went the entirety of 2011 without watching a single full baseball game because I was never able to get those "tricks" you mention to work reliably. If you're fine with your sportsball access being intermittent and possibly crappy or non-existent, then read on. I very recently (like, last week) finally added TV back on my TimeWarner account just to get my beloved Yankee's games back. I also told the kids that the only station we pick up is stations that are currently playing Yankee's games, so they have yet to figure out that we get the Disney channel again[3]. We'll see how long that lasts.
Next, have you hooked an antenna up to your existing TV, to see what channels you get? The boxee attachment isn't magic - if you only pick up PBS and that religious station now, that's all you're getting with boxee as well. At my previous house, less than a mile from where I'm at now, we got one and half channels OTA. Here, if the wind is just right and nobody has touched the antenna since the last time I dialed it in, we can pick up five or six. We rarely watched the OTA stuff even when that's all we had, so that may not be a big deal for you.
Now, lets say that sports aren't a huge deal, and your SO is understanding of technical difficulties (especially at first). What do you get? Well, my recommendation is the atv2, specifically the one that was just released (1080p!). If you don't have a 1080p tv, and don't plan on getting one soon, you can often pick up the previous gen direct from
apple.com refurbished for cheap ($79, I think?). Even out of the box, it's fairly capable. You can buy and rent movies and buy TV shows (including full seasons), it has netflix (of course, my toaster has netflix), it syncs up with icloud/itunes match, and has
mlb.tv, nba, nhl, youtube, vimeo, and even flickr support build in (helpful if you're feeling nostalgic for 2006). The
mlb.tv app is very nice, but only if you like a team other than Toronto or the Yankees (stupid blackout rules).
Possibly more importantly, it works very well if you've bought into the apple ecosystem. Airplay really does work great - my kids figured out how to hook their iPod touches to the apple tv, to watch funny videos, without me even telling them that it was possible, let alone how to do it. This last weekend, we ended up watching 8 hours of video on the atv2 over two days, streaming via Airplay from my iPhone, without a single glitch (no, it wasn't youtube videos). If you lose the little grey remote, any iphone/ipod touch/ipad will work. And any show that you buy on the tv can be watched on your Mac or iPad.
But most importantly, it's very simple to hack an atv2 and install xbmc. This allows me to plug into my automatic completely-legal-content delivery system. I use a combination of
showrss.karmorra.info, flexget, and deluge-torrent to grab my completely-legal-content and drop it onto an nfs server, which I have mounted within xbmc on the atv2[5]. Flexget even has a plugin for
prowlapp.com, configurable to send to different accounts depending on the completely-legal-content, so that my wife gets a notification on her iPhone when her show is downloading, and I get notifications for my shows and "our" shows[4]. xbmc will auto fetch things like covers and episode summaries for new shows, so that it looks nice and professional (i.e., it's not just a plain list of directories and file names, *and* it takes pretty much no effort on your part). Oh, and for most shows, we can even watch the same night. This was even more common when we lived in the Mountain time zone, but it's still fairly common for a show to be available to watch the same night it airs.
Final possible drawback - it takes actual forethought and planning to watch something. You can't just sit down with a remote in your hand and flip through channels. Now, I have roughly 2T of video on my nfs server, so pretty much whatever genre-itch I have can be scratched. But if you don't have it downloaded, and you want to watch it *now*, then you're probably sending a few bucks Apple's way. I would also question the "need" to watch something *now*, but whatever.
If you have any further questions, either on my setup or what life is like w/out cable[6], let me know. I'm happy to bloviate at length about things, ask anyone who knows me.
Hope that helps,
David
[1] It's still kicking around somewhere, if anyone wants it. I forget the make/model, but it was the one that was made for linux specifically. I got an EFF sticker with it "Freedom has a Posse".
[2] Measured in terms of number of times your SO asks "How do I do <simple thing X>?" and the answer is "Hold on, I just gotta jiggle <thing y> first, and then it'll be awesome!"
[3] This is true, btw. I don't know what it says that my kids are that gullible, but I'm sure it says something.
[4] I'm proud of this, because I actually modified the existing plugin to support multiple accounts, and got the patch accepted upstream. Go open source!
[5] If I even have time to actually make it to a barcamp, this is probably what I would take about, honestly. It's a pretty sweet setup.
[6] Yes, I have cable now, but like I said, I didn't for six of the last seven years.