Here's what I was told by a tech who has done several of these. Specifically, this was his response when I told him I was thinking the best solution was to buy a convertor box like the AA 9A 60 and then optimizing the picture using SwitchResX:

"While it is technically possible, this conversion is not recommended. You will never achieve resolution approaching hd. In fact, with capture conversion you will actually loose resolution. Simplify your project by adding an hd tuner from your local cable company or sat provider. Most of the newer boxes feature a passthrough dvi or HDMI connection. Once you've done this, you can then connect your mac through the cable box. Your TV should still be able to connect to the box using traditional component inputs. Enough data will flow through to produce a real hd image."

So anyway, based on what he told me, I called my cable provider and they said they can trade out my old Motorola HD cable box (no HDMI or DVI passthrough inputs) for a new Motorola box that does feature DVI inputs. The icing on the cake-- it's a DVR. Yes, the DVR service is going to be $10 more a month, but I was going to have to pay around $120 for a new AA 9A 60 and another $10 for SwitchResX, so I'm ahead of the game for year one in terms of price, plus I avoid having to make resolution adjustments and I finally get DVR service (much to my wife's chagrine).

Anyway, I'll let you know in two days when they come out with my new box if it worked as planned. If not, I'll be bummed, but at least we'll have explored a potentially good alternative.