Here is my two cents, based on Dish and on Comcast (San Francisco Peninsula). Some channels do look better on the digital cable, but some are just plain unwatchable. In my case, the analog channels look grainy, though I have heard this is an issue with the Motorola 5100. As for the digital channels, I noticed VH1 Classic and TV5 on cable had major pixelation. Dish's picture can vary from channel to channel. But I too would suggest making sure the TV is set up correctly (using Video Essentials) and to use decent video connectors. And the program guide for the Motorola box is a joke-the worst Dish program guide is 10 times better.
I would say in either case if you can, get an HDTV package with whatever you go for. My cable company offers locals, plus ESPN,INHD and some movie channels, and the picture really shows off what your HDTV set is capable of.