You need a graphics card with video in. Or a video capture card if you want to record TV programs. Yes, you will need cable or satellite service. I know of no online providers that provides streaming subscription services. I do know that ABC, FOX, and maybe NBC are looking into providing subsription based online video content. Anything to get viewers to watch more commericals.
Unscramble channels are not a problem for a capture card or video card with video-in, but any channel that is scrambled will not unscrambled by either video cards. Scramble channels must be unscrambled by the cable/satellite box before being feed to the PC. Many video capture cards can also recieve unscrambled channels over the air (broadcast channels). Depending on where you are the signal could be good, or most likely bad with lots of "snow".