Canceling Cable?

Sarah and I are looking at making a major shift in our media consumption habits this fall. Most likely we'll be canceling our cable subscription in favor of getting all of our visual media needs in more efficient, on-demand formats. We're thinking that we'll unplug ourselves from cable around the first of August and see how it goes until the first of the year. I've been thinking about the idea for quite awhile, and the recent experience with Dr. Horrible leads me to think the net is becoming a viable distribution tool. The big drawback to this shift is that a lot of content isn't HD right now, but my guess is that will change soon.

There are several reasons for this experiment. The biggest factor is probably the budget. We were evaluating our spending and trying to make some changes because of the increased expenditure of seminary. Turns out we're giving over $100/month to Mediacom. Another factor is that we watch entirely too much television. It's the easy evening activity - we'll watch reruns, bad reality tv (Sarah is obsessed with anything in the Idol franchise), and other pointless content. My guess is that we'll read a lot more without the ability to flip through channels. The DVR has helped focus our TV viewing, but even when there's nothing we really want to watch recorded we'll still watch something. The most interesting factor for me though is the social experiment of trying to stay up-to-date with culturally significant programming without cable/satellite. 

I think we can get everything we would want to watch from iTunes, Hulu, network sites with streaming video, Netflix, and video podcasts. Netflix is the only traditional media we'll be receiving, but I imagine that will change when their watch it now feature is available on the Xbox 360. Our initial plan is to watch content legally without purchasing it whenever possible. When that doesn't work we'll buy content from iTunes.

Our setup:

• HD LCD TV
• AppleTV
• XBOX 360
• DVD player
• PC to be rebuilt into some type of media center
• 6mb DSL

I'm pretty confident that this setup will work. We won't have the PC reconfigured immediately, so there will be a period of hooking one of our laptops up to the TV or just viewing on the laptop. There's a possibility I'll hack the AppleTV so that we can use it as much as possible.

The only thing I'm aware of not being available in any of these formats that I watch regularly is Good Eats from Food Network. I'm wondering what it would take to get Netflix to add the DVDs to their library. As far as we know most of the call-in shows (Idol, So You Think You Can Dance, America's Best Dance Crew, etc) aren't available in any type of digital format. It doesn't matter a lot to me, but Sarah will miss this programming.

Has anybody else made this sort shift?  Anyone have suggestions for content sources? AppleTV hacking tips?