I've read that the US government has passed legislation requiring all broadcasts in the US to switch over to "HD" standard by 2009.
Okay cousins, spoke to a reporter who's beat is the televison (electronics side)/electronics industry who works where I used to work as a marketing assistant (about 100 years ago). Below is the 'skinny' on the changeover. As you'll see, thankfully, it's not as bad as some of us (me for sure) thought. We won't have to get HD TVs, as Gothick had thought, just ones that are digital which I'm pretty sure covers both my TV's and I daresay most of everyone else's here.
But, for those who don't have a digital TV, read on!
Also, the question of what does the FCC have power over is also answered and as I suspected, they indeed ARE the TV Nazi's! 
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You are correct that the govt. enacted legislation establishing a "hard" cutoff date of the analog terrestrial broadcast service on Feb. 18, 2009. It means current TV sets that rely exclusively on an over-the-air analog signal will go dark on that date. The mandated changeover in fact is to digital from analog, not necessarily HD, as not all digital TV sets will decode HD and not to the maximum resolution possible ("1080p") using today's technology.
To protect one's analog set from going dark, there will be several available remedies: (1) Subscribe to cable or satellite; (2) Buy a TV set with a built-in digital ("ATSC") tuner. As of March 1, 2007, under FCC mandate, all TV sets shipped from the factory with a built-in analog ("NTSC") tuner must also include a digital ATSC tuner. (3) Buy a set-top DTV converter box, once they become available.
On the 3rd point, the law enacting the hard cutoff also provided for establishment of a program under which the govt. will mail $40 coupons to households that request them. The coupons then can be taken to retail and redeemed within 90 days toward purchase of an eligible DTV converter box through an eligible retailer. The box is expected to cost about $50. A household may request up to coupons, and the govt. is mandated on Jan. 1, 2008, to begin accepting those requests and mailing out the coupons.
Final rules for the program are being drafted as we speak that will govern which retailers will qualify to sell which boxes. But a couple of things to bear in mind: (1) Coupons likely will be distrributed on a first-come first served basis, while supplies last. (2) Supplies are not unlimited. Currently, there's enough funding for the program to cover about 35 million coupons, and opinions vary widely on how many TV sets rely exclusively on over-the-air analog. There's also very limited funding for a consumer education campaign, and it's assumed the CE industry will band together with broadcasters to mount the needed consumer outreach. But we'll see. For the time being, hundreds of millions of Americans -- including the "early adopter" consumers who usually are the most knowledgeable about new CE products and technologies -- have no idea the Feb. 18, 2009, date awaits them.
On another point you raise about FCC jursidiction, the Commission certainly does have oversight responsibility for cable and satellite in addition to traditional over-the-air terrestrial broadcasting. Ironically, though, the FCC figures rather little in the DTV coupon program, except for a role in which they'll help certify which boxes are eligible for the coupons.
