After a lot more analysis I think I found the best option for the TV situation.
The PVR system available from our cable provider costs $650. It’s a pricey option for sure and has limited usage. it can tune the analog and digital signals, allows you to record live TV and navigate the Listings. What it doesn’t do is let me watch downloaded content.
AppleTV is cheaper at $230 but it doesn’t have a tuner and getting downloaded content to it could be a bit of annoying computer work.
The final solution I found is to get a Mac Mini and pair it with an EyeTV tuner. The tuner provides a digital/analog PVR functionality for recording/pausing/rewinding live TV. Any recorded content will show up in Front Row for easy navigation later. And because it’s a full computer it can handle any kind of downloaded content. The hard drive space can be easily expandable and it can handle streaming content from the internet. It’s also a bit expensive – the computer is $650 and the tuner is $150.