The signal before the STB is most likely encrypted. The STB is a de-crypt and display device for the cable company. Most cable companies will send QAM in the clear for the 1st/2nd tier channels. You can bet the premium stuff is encrypted.
As far as getting around DRM: Simple solution is not to consume it in the first place. I can only describe people that swallowed that particular hook, line, sinker (iTunes/Play for Sure/Whatever) as morons. Sorry to come across as harsh, but what did you think you were getting exactly?
I have read that with DVD's you can get around the CSS encryption with products like ImToo, DVD-Decrypter, Any-DVD. There are others, these seem to be popular choices. This may/may not be legal depending what country you are in.
I purchase mainly used CD's. So I have my entire collection on my HTPC. No encryption worries there. Used CD stores, used CD's from Amazon and I am only on average paying about $0.35-0.40 cent's a track (if even that) with the following benefits:
1. No lossy compression
2. No DRM. It's mine dammit
3. I always have the source
4. By buying mostly used, I don't give my money to the labels. There are a few artists I give my money to by purchasing new from their websites.
An IR repeater should simply work. So no worries with there. Remember that Linux is only free if you place ZERO value on your time. If you want to be up and running in an hour, go with Vista MCE.
www.thegreenbutton.com is THE place for all things MCE.