Up until recently I worked in product mgmt in the IPTV organization here and have some quick thoughts.
The cable co's have an absolute bandwith limitation in that most of their backbone is coax, which has a fixed ceiling as to how much bandwith intensive programming they can take on. They are trying to address this by pushing the programming content as far out into the neighborhoods as possible (those big metal cabinets in your neighborhood hidden by a bush), that way, when you request a program it is resident at that cabinet and there doesnt need to be a dedicated path for you all the way to their central office. This helps with bandwith, as they deploy all of the content to those cabinets, and then the cabinet routes it to the requestors. So instead of 100 people grabbing ESPN HD from the central office, tying up that bandwith...ESPN HD is provided to the cabinet as one path, and grabbed from there. So while they have bandwith limitations, they can defeat it by laying more coax from the central office to the cabinets..
Satellite is a bit different in that their bandwith limitation has zero to do with existing delivery infrastructure. It is all about satellites in the sky, dishes that can recognize and receive from all of these satellites and compression. Rumor is that next year, they will be launching 3 more sats in the air, which will allow them to deliver HD locals for every local that they provide SD service for today (though I agree with Scott that if you have the option, receiving HD locals over antenna will beat the DTV PQ every day of the week),and 40 more cable style HD offerings (who the hell knows what they will offer here...likely the channels that Dish Network offers over HD today). In addition to the satellites, they are driving customers to replace their existing 3 LNB dishes with 5 LNB dishes to get all of the satellites and new receivers to be able to receive and decode MPEG4 compression.
On compression real quick...it is a misconception that some providers do not use compression, the fact is they all do. The only cut out is the programming received over the air. And from what I have seen they all will be moving to MPEG4 and whatever compression algorythyms continue to come out to be able to increase their offering without necessarily increasing the size of their pipe.
The last providers are the wild card here, the telcos. They have the network in place in some areas to immediately jump in and provide TV services. Add to that, they are losing business to Vonage and cable co's, so they are looking to mega package all services (voice, mobile, data, video). Currently in most markets, they are gated like the cable cos are in that their embedded infrastructure cannot handle the high bandwith requirements associated with TV. But, in the neighborhoods that have deployed fiber optic cable, their bandwith is significanly larger than what anyone else in this space can offer (considering in the cable space you would need to lay a bunch of coax, and in the satellite space, you would need more sats in the sky and new receiver equipment). The key is and always has been fiber in the ground. That said, Verizon has 2 experimental neighborhoods, one in Florida, one in California that they are providing quad services to today (phone, mobile, data, video), and once they perfect the business model, I would expect to see them and other service providers jump into this market with both feet. Fact is they absolutely dominate the cable cos, by in effect giving away phone services at cost and make it back on video/data. In addition to the fiber though, acquiring content (which is not cheap) is a barrier to entry. But I dont see this as a huge issue to these guys in that they are losing money through lost voice services by not doing this and most of them have the coffers to cover the initial expense, as long as the business case justifies it on the back end.
So, long winded answer...bottom line, I am planning on continuing getting my TV via DTV and OTA, and my phone and data from timewarner cable...fact is DTV dominates TWC when it comes to available programming both in HD and SD. However, when the telco service providers enter this space in my region, I will be all over it...