I am in the same boat and have been following all the info I can find. This issue is called the "analog hole". The short answer is "maybe".
As I understand it the FCC has ruled that any set top box that is receiving an OTA broadcast signal, even if carried on cable or satellite, is NOT allowed to down rez on component outputs. In mid November the FCC approved the "broadcast flag" to be added to OTA signals if the copyright holder requires it. I made a copy of the part of the FCC statement on the analog hole which is below. All equipment made after July 2005 ( I think) must recognize the broadcast flag, much to the outrage of computer manufacturers. The FCC has previously approved 13 different(!!) encryption technologies that recognize the flag to allow home recording with the correct devices. Keep in mind many want to home network a computer with HD card and record DVDs. Eventually HD DVDs.
As I read the statement below, FCC decided not to rule on non-broadcast channels like ESPN HD, HBO HD etc, since they are under the control of the companies that send out the signals. They may add a signal to down rez, if they want to, but this would be counter to the intent of the FCC message, but not illegal-FCC left it in limbo. My guess is that the regular HD channels we get by monthly subscription will be safe, since the companies would be "cutting their own throats" to ask me to pay for a HD package on DirecTV and then take it away by down rezing. However I suspect we maybe could see PPV HD events be down rezed. Eventually, HDMI-HDCP will be the only safe way to assure all HD content. But when? I was hoping FCC would prohibit all down rezing,like they did for broadcast HD, but they bypassed the issues--for now at least.
Some say "buy computer stuff now before the window closes", others say "wait".
The November, 2004 FCC statement ( you decipher it!):
"The Commission also addressed what is described as the