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It depends what you mean by real. Cable and Satellite companies compress their signals, but I would not call them crap. Granted, if you could pick up the OTA signals it would be slightly better, but even a compressed HD signal is far superior to SD. I think 98% of viewers would be hard pressed to spot the difference between compressed and non-compressed HD.

I think you're wrong on two fronts:

Cable, or at least Comcast cable, is not additionally compressed beyond the initial compression done at the broadcast station. In other words, it should be the same as off-the-air (OTA), but maybe a little better since it shouldn't lose as many packets in transmission.

Regarding the public perception of compression, it is quite noticable, even by Joe or Jane 6-Pack. Where it is most noticable is in moving scenes - like in an action sequence or anything with a panning camera. These scenes result in massive macroblocking - think of it as ugly digital blurring.

A case of this being noticable is when KQED, my local Communist Propaganda Outlet (otherwise known as PBS station) switched their night-time profile from one small SD subchannel and the rest dedicated to HD, to (at least) 3 (? or 4?) full-time SD-subchannel with the rest for HD. Everyone now comments how horrible the once pristine HD channel now looks. What once was a joy to behold (for non-political content) is now an unwatchable mess.

They supposedly are using advanced bit-tweaking hardware to "steal" bandwidth cleanly, but it isn't working. All this to run PBS-Kids, Spanish programming, and another PBS (largely propaganda) subchannel 24-7. Insane.

Cable, or at least Comcast cable, is not additionally compressed beyond the initial compression done at the broadcast station.

I've noticed this as well. When I lived in a previous residence I had an indoor antenna hooked to a computer with an ATSC tuner card, as well as Comcast HDTV service. When there were problems with the Comcast box on an off-air channel, I would look at the same channel using the computer and notice the same problems. I did not notice any difference in picture quality between the Comcast service and the off-air signal.

Regarding the public perception of compression, it is quite noticable, even by Joe or Jane 6-Pack.

Regrettably the average person is not that particular about quality of sound or video and hardly notices. I am not sure Blue Ray or HD-DVD will make a big splash. People are happy with mp3's and crappy video from YouTube. People want on-demand information and it will be compressed. Content is king and the quality of the video and sound is a minor consideration, IMHO.