My memory is a bit foggy but we've been cable TV free for about a year now. There are a few things we miss but honestly, those few things are not worth ~$45 per month. I did some research, went to RadioShack, argued with a sales guy about UHF and VHF, bought a $70 UHF/VHF antenna, installed that sucker in the attic, and cancelled our cable. We get ABC, NBC, CBS, Fox, My New TV, CW, and PBS all over the air. Using the federal DTV transition program, we got two DTV converters for $40 total and eventually bought an HDTV. Our savings from ditching cable will pay for the TV in just over a year!
We also bought Playon around the holidays when they had a ridiculous sale going on. With Playon, we can stream all kinds of media from various sites (like Hulu) to our TV via our Xbox 360. It's a great deal even at the regular price. Since we enjoy movies so much, we also subscribe to the three dvd Netflix plan which includes instant view which also streams to our TV with Xbox 360 and Xbox Live. For $17 per month, it's a fantastic deal if you watch a lot of movies.
If you haven't figured it out already, it was well worth it! If the price of cable packages drops dramatically, we may consider signing up again, but I find that pretty unlikely. We're pretty happy with our media options and we're saving quite a bit. If you've been thinking about cutting the cable but are holding back, let me know! Maybe I can help you pick out hardware, software, and alternate service plans. Just leave a comment!