I've been without cable for a while now and it's been great. They key to making the move, I think, is to enter with the understanding that you cannot exactly replicate the cable experience. You can come close by cobbling together a system, but there will likely be gaps. The trick is to understand what those gaps will be and determine if it's a problem for you.
I'll give you my example. I generally watch very little "live" television, and there are only a couple of shows that I regularly follow. I work during the weekdays, and don't watch very much television on weekends, so daytime television is not a concern for me. I use a simple combination of Netflix (both disc and streaming) via my Apple TV and my PS3, my own collection of DVD rips via the Apple TV (which I also use extensively for streaming my music library to my receiver), regular Hulu via a MacBook Pro I have hooked up to my television, and the occasional live broadcast. Since I am still a cable broadband subscriber (Comcast), I simply connected my coax right to the television for unencrypted access to the networks and PBS. Hulu acts as my DVR.
I generally don't watch sports, so missing out on ESPN doesn't bother me. There is only one cable show that I watch ("Breaking Bad"), so I'll have to either wait for the upcoming season to come out on disc or just buy it on iTunes. I'll probably do the latter. I've never had premium cable like HBO or Showtime, and have always watched those shows on disc.
I could simplify my system even more by just using my PS3 and signing up for Hulu Plus. But I like the Apple TV interface and I like streaming my music, and I don't watch enough network television shows to have a need for Hulu Plus.
So, in short, think about your viewing habits and what the bare minimum you would need in order to keep you a happy pop culture consumer. You can always add devices and services if you need them. Start with what I did: I cut out my cable and DVR for two weeks before I formally cancelled my service, just to see what it would be like. After a day I realized it was just fine.