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CrimandEvil said:Digital cable box> Analog out> PVR capture card
Right now thats the only way to do it but your digtal signal gets converted into an analog signal and only the first 125 channels work. Good news is that later this year Microsoft is release an update to MCE (titled MCE2k6) that adds support for Cable Card which is a decoder card that you get from your Cable Company that plugs into your TV and lets you watch Digital cable (sorry Sat doesn't support it) without having to get a cable box. Hopefully this means that well see the CC plug in decoder cards show up for sale on sites like Newegg and other PVR apps begin to support it soon after.
For controlling your CB try looking to see if it has serial since some apps are able to control it over serial (and some cases even USB), if not then you have to get an IR blaster like many have mentioned already.