Information on the digital TV switch over is available here:
http://www.ntia.doc.gov/dtvcoupon/index.html
or
https://www.dtv2009.gov/
Those sites also explain the process for requesting converter coupons from the US government, intended help defray the cost of up to two converter boxes per address. The coupons are for $40. Estimates are that consumers will have to pay an additional $10 - $30 beyond that for an eligible converter.
"Eligible" converters must meet a set of specifications that include some features and prohibit others. Generally they will do everything needed to convert a standard def digital signal for use on an older analog set, but don't have all the bells and whistles that a high-end converter would have (e.g. digital video outputs, HD resolution, etc.).
Note Digital TV is NOT the same as HDTV. You don't need to buy an HDTV to watch digital TV. See:
http://www.fcc.gov/cgb/consumerfacts/digitaltv.html
In particular it notes: "Therefore, after May 25, 2007, all television equipment being sold should contain a digital tuner, or should be identified at the point-of-sale as not having one. Be sure to look for this label if you are purchasing a new TV."
Digital stations will broadcast an ATSC Standard Definition (SD) signal that is of comparable quality to the current NTSC analog signal. "Standard Definition" DTV's (i.e. they are not HDTV's) are currently priced $150 and up at my local big box retailer.
I haven't seen any portables yet. Personally I think it will be a while before we see 3" DTV's; they present a number of technical challenges the industry has yet to address.
Over-the-air digital that I've seen (and helped hook up) looked very, very good. Experiences with digital cable may not be a good guide here since OTA generally uses less compression than many cable systems. As noted above, the picture is all-or-nothing. You either get a blue screen or a perfect picture. A good UHF antenna (existing or new) is important for best reception.
+1 to GJW's point: If you've got cable or satellite TV, this is a moot issue.
Having said all that...I'm listening to satellite radio
Cheers,
Bob