You could sure go the HTPC route. You'd just need an OTA HDTV tuner to pull in your local Fox affiliate and other ATSC broadcasts - easy enough to come by. Between Hulu Desktop and Netflix, you should be able to round out your (video) media. On the OS side, you could go Windows 7 - the media center interface is quite good, and will give you DVR capability, allowing you to throw out the Tivo and its associated fees as well. Your other option (that I know of) is Linux. Look at MythTV or SageTV. Of the two, I like Mythbuntu - it's Ubuntu with a MythTV overlay.
The problem, as I see it, is that no HTPC is ready to be a consumer electronics product yet. Some technical expertise is absolutely required. If you go the HTPC route, best to think of upgrading and maintaining your HTPC as a whole new hobby. Good luck!