If you get a new digital-ready TV, it should be ready to receive digital channels out of the box.
If you want to keep your current TV, all you need is a digital set-top box – which shouldn’t cost any more than $100 at most. Just plug the cable from your antenna into the set top box (instead of the TV), and the cable from the set-top box into the back of the TV. You don’t need to upgrade your antenna, the antenna that you used for analogue television will be just as good.
You will probably need to tune in the channels into the set-top box. From now on instead of changing channels using the TV’s controls or remote control, you set the TV to AV mode and use the set-top box’s remote control to change channels, etc.
I’ve upgraded and digital TV is definitely worth it, with programme guides, a much better quality picture, and the best thing – extra channels. As for HD TV, the benefits are the same as digital TV, plus the picture is even better and there are even more extra channels than digital TV.
If you want to receive HD TV, you can just follow the instructions above, except with a HD set top box. Your TV does not have to be HD in order to receive HD TV (so you will get the HD-only channels), but the picture will NOT be HD. To get HD pictures, you will need a HD TV (some HD TV’s will come without a tuner, so you will still need the HD set top box).