This is exactly the way the cable companies want it too. Make it difficult to have a 'choice' and people will run to the cable boxes that you cannot purchase every time. Pretty sad.
With that said, I'm trying to learn as much as possible from those that have already done this to make the transition easy and for some reason, I'm scared that it will still be a pain in the butt.
If it's the HDHR', you should only need to hook it up to your LAN, run the software the first time to assure that it's there. It now occurs to me that info provided by WMC that needs to be given to the cable-provider for activation is available through the HDHR' setup software under "CAbleCard Menu." CableCard Menu will show as a second item of sub-menus "CableCard /Host ID Screen." Write down those two numbers -- the screen will even provide the number to call for your provider, which is encoded in the card.
Once you're Activated, VAlidated etc. and the main HDHR' webpage status screen shows "Success, success, success" and "ready" for Card authentication, OOB Lock, Card Validation and Tuning-Resolver, you should be good to go with the Media Center setup.
As I noted, you should power-cycle the HDHR' once you've activated with the provider and before you check for "success, success . . . "-etc. Do the Channel Lineup detection and scan, which can take a good half hour to complete.
You need to have MC download and configure "Digital Cable Advisor" and go through the setup screens. It will provide the same information with the card and host ID's and phone-number, but you should just click through the screens.
You're right that the extra complications or tedium is Jack Valenti's fault with the media content-protection Nazis, but . . . that's the way it is.
You could also go the route of having an internal PCI-E tuner card with coax ports. This would connect to your provider's STB, and needs a single channel. The Windows MC remote receiver (infrared device) has option cables that stick on your STB close to its own infrared sensor and allows you to control it that way. I just haven't experimented with the STB/tuner-card option recently, but I once had it working. It wasn't all that much of a problem, either.