We've decided we're going to experiment, and try living without cable or satellite TV for awhile. Where we live, we can get all of the broadcast stations, so we'll pull those off the air and feed them to our TV and my Mac-Mini-as-a-DVR computer. We might even consider paying for Hulu Plus, so we can view shows faster and via the Xbox.
I looked at stuff that we regularly recorded on our DVR, and about 85% of it was from broadcast stations. There are a few things we (mostly Diana) watched on cable, but she's willing to try without. We'll be missing PBS Sprout, which is Simon's fave in the mornings and evenings, but we can find some stuff to DVR from broadcast PBS.
While this is not a budgetary concern, it is something that I think we've just taken for granted as a "necessary" expense. However, these days, between Hulu and Netflix, I just don't see a reason to shell out the cash. I'm all for buying a dumb pipe.