As you know, we are less than one year away from the transition to digital television. The National Association of Broadcasters (NAB) and television broadcasters nationwide are spearheading a billion dollar educational campaign to ensure all television viewers are aware of the switch. You can also assist in this effort with one simple action: Please forward the following email to all friends, family members and colleagues in your inbox address book. By participating in this viral email campaign, you can ensure none of your friends or associates lose access to television when full-power TV goes all digital on February 17, 2009.

Are you aware and informed about the transition from analog to digital television? More importantly, are you prepared? The digital television (DTV) transition is happening on February 17, 2009. At that time all full-power TV stations will be broadcasting in digital. Make sure your TV is ready.

In order to give all viewers the best quality television available and more efficiently allocate spectrum, the federal government mandated that television broadcasting switch to an all digital format by February 17, 2009. Older television sets that do not have digital tuners, and that are not connected to cable, satellite or another pay TV service, will need a simple converter box in order to continue to receive free antenna television.

The good news is that people who watch antenna TV have three simple options to upgrade their sets in time for the transition to digital: purchase a new television set with a digital tuner (and some new sets are selling for under $100); purchase a converter box, which may cost between $40 and $70; or subscribe to a pay television service like cable or satellite.

To keep things as simple and affordable as possible, the government is providing two coupons per household worth $40 each to be used toward the purchase of converter boxes. For more information on this program, call 1-888-DTV-2009 or visit www.dtv2009.gov to apply online for your coupons today.

The switch to digital is a revolution in television - providing clearer pictures and amazing sound, as well as additional channels and information. And the best part is, all of this is available for free, just by ensuring your television is ready. Make sure you are ready for the switch to digital and be sure to inform your family and friends by forwarding them this email. For more information on the amazing transition to digital, visit www.dtvanswers.com.

Even though from everything I've seen digital broadcasting is more likely to look horrible... Is it also a switch to only HD, or just a switch to digital? No one ever had a clear answer.

No it is not a switch to HD only. Most television stations will pass through or create HD programming where available and will upconvert SD programming otherwise. 

You might be able to get more info from here. http://www.dtv.gov/whatisdtv.html

Cnet:

"You Might Want to Wait on that DTV Converter Voucher"

1. The coupon expires in three months
If you carefully read you the FAQ on the government's Web site, the program clearly states that the $40 coupons expire three months after they're shipped. That's unfortunate because we're guessing many people don't think much of it, and are just trying to sign up before they forget. Now you're forced into getting whatever DTV boxes that are currently on the market, even though...

2. Better, cheaper boxes are coming
None of the DTV converter boxes we've seen so far are available for $40 yet, which means you'll need to kick in some real American dollars in addition to your coupon. Echostar is planning on releasing a $40 converter box, the TR-40, but it won't come out until this summer--so if you already have your coupon, you probably won't be able to get it. That wouldn't be so bad, except that the Echostar TR-40 looks like it's going to be substantially better than current models, offering a full EPG and program search functoinality. Even if the Echostar device isn't everything it's cracked up to be...

3. Current models will get cheaper
This is just an educated guess, but don't be surprised if all of the current DTV converter boxes currently going for $50 to $60 suddenly drop to $40 once the Echostar TR-40 comes out. It will be near impossible for the other boxes to compete with free, so they'll be forced to sell for $40, which means it essentially free to consumers with a coupon.

Fun...

Also don't wait to long because there is a finite number of coupons that are going to be distributed. I sat  through a webinar by the NAB that stated currently the backlog on processing coupons is at around 8 weeks. They urged people not to wait too long because they could run out of coupons or they might not get them before the Feb 17 transition.