With that kind of set up, you definitely need a source for local HD, and probably cable or DBS, too. Local HD is defined as the 7 standard over-the-air (OTA) networks; ABC, CBS, FOX, MyNetworkTV, NBC, PBS, The CW (soon to be 8 with the addition of ION).
Let's get started.
QAM modulation is what cable uses for sending digital HD & SD to end users. An HD cable box is a QAM tuner with conditional access, to let you see all the channels you pay for. Cable does send some HD channels in clear QAM, which means the channels are not encrypted and do not need a conditional access tuner. The clear QAM channels are the local OTA stations in your area, that the cableco carries. Not all cableco's carry all the local OTA stations available in an area. With a QAM tuner, available in regular HDTV's, stand alone tuner boxes, digital TV PC cards, and PC USB tuners, you can connect the cable and get all the local HD your cableco offers. These Clear QAM local HD channels are available with all cable programming packages, even the least expensive ones.
To get additional HD cable channels beyond local HD, you'll need one of two options; an HD cable box or CableCARD host device. The HD cable box has some advantages over a CableCARD, including video on demand, pay per view, and the cable on screen interactive program guide. It also is essentially lifetime warranted by the cableco; if it breaks they replace it at no additional charge. The main disadvantage is the monthly rental fee, which is usually around $10 for one that records; an HD DVR.
For your projector, the stand alone CableCARD host device option right now is the TiVo HD, a digital cable compatible recorder. It accepts the CableCARD which is supplied by the cableco for around $5 per month, and gives the TiVo HD conditional access to all the digital SD & HD channels you subscribe to. The upside of the TiVo HD is that it's a TiVo; if you've ever had a DVR, the TiVo is generally considered the cream of the crop. Very slick user interface and interactive program guide, it can also be upgraded to hold more programming by replacing the hard drive or emptying the hard drive to a PC. The downside of an TiVo HD is the subscription fee, no VOD, no PPV, and you have to pay for it. Check the TiVo web site for details, and there is a very good dedicated TiVo HD topic in the HDTV Recorders Forum.
At some point in the future, a new cable standard called tru2way will supersede the existing CableCARD system. tru2way is a two way conditional access system that will provide everything CableCARD currently does, and also VOD, PPV, and interactive program guides. tru2way HDTV's have just hit the market and it's expected stand alone tru2way boxes will be available sometime in Q3 2009.
As for DBS, there are two choices, Dish & DirecTV. Both have advantages and disadvantages. Dish has lower priced HD only packages, but slightly worse HD image quality compared to DirecTV, which has more sports programming options, including the exclusive NFL Sunday Ticket. Depending on where you live, both DBS providers may offer your local HD channels. See the HDTV National Channel Lineup topic in the HDTV Programming Forum for the HD channels both offer. You may also want to look at the HDTV Programming Synopsis, also in the HDTV Programming Forum, for a rundown of HD channels available, because not all HD channels are carried by all providers. With DBS, you'll have access to everything they offer, with cable, it will vary based on your location.
To see how your local cable stacks up against the two DBS providers, for HD image quality and HD channels, check the HDTV Locals Forum, which has topics for all the local TV markets across the country.
The final option is receiving only local Digital TV using an antenna and DTV tuner. The most popular DTV tuner is the Samsung DTB-H260F, and costs about $170. It has both an over-the-air digital TV tuner and Clear QAM cable tuner, if you decide to stay with your existing cable programming. For your application, and if you only want local HD, I would recommend this option over the PC route. The Samsung has HDMI out, which would go into the Onkyo for audio, and out of the Onkyo for video to the Epson. (Any of the cable supplied HD boxes or TiVo HD would be hooked up the same way.)
If you go OTA you'll need to have an antenna, outdoor is recommended, and you'll need to explore what local DTV stations are in your area. In general, you need to be within 50-60 miles of the local DTV stations to receive them with an antenna, but once the system is set up, it's completely free.
There is also a new DTV recorder available called the DTVPal DVR. It will not work with QAM cable. Initial reports are so-so, with many users having problems.
I've probably missed a few things, but this should answer a few of your questions. I hope. Whew.
