Seen as this is an "international perspective" allow me to share my experience in Australia. Here we have analog, digital and HD free-to-air channels. When we got here we got given an old SD STB by someone who was upgrading to a HD STB. Our 72cm Sony CRT TV that we brought from South Africa couldn't pick up HD so we could only receive the analog and digital signals. Last week we bought a 46" Sony LCD Z5500 200Hz TV (for A$2399 with a free Playstation 3). Now we dont need the STB so in the bin it went.
We get 11 free channels (ABC1, ABC2, ABC3, SBSONE, SBSTWO, Seven, 7TWO, Nine, GO!, Ten, ONE). These are all transmitted in Analog, Digital and HD. Then in addition to these there are regional versions of some of the above channels (Prime, WIN, NBN, GWN and Southern Cross Television.) All are transmitted in Analog and Digital. Regional TV basically is the national TV with local adverts and local news.
All of the above is absotely free. There is no such thing as a Television licence in Australia.
The HD digital TV is awesome quality. You cant actually believe such quality is being picked up by the rickety old TV aerial on my roof. The digital channels (both SD and HD) have an EPG exactly the same as DSTV. In fact Digital TV feels like the same experience as watching DSTV with info bars, story lines, program guides, next show info etc. So digital basically gives free-to-air TV all the electronic benfits of pay TV.
But the really nice thing is the free to air carry all the latest episodes of the various series. If you want reruns and repeats then you need to get Pay TV like Foxtel, iSelect, Austar, Optus TV, Telstra TV etc.
Once you have experienced digital you just cant go back to analog. It really is like watching a Black and White TV versus Colour. The difference and experience is that great.