For decades, we happily ran with analog TV signals and receivers, but the advent of digital changed this. Digital has higher resolution, is less prone to interference and uses power more efficiently. Analog TV receives fluctuating levels of electrons that are converted into an image, and whatever is received by the box is displayed by the TV in real time. This can include things like white noise caused by interference. Unlike an analog TV, a digital TV has memory, so it can delay displaying to the screen while handling errors and filtering to weed out imperfections.
With digital, image and audio signals are sent as octal (base-8) or hexadecimal (base-16) packets of data. They are most often compressed using the MPEG-2 standard (Moving Picture Experts Group), although some broadcasts use the newer and more efficient MPEG-4 compression. This compressed data is decoded by the receiving TV. The equal-sized packets of data (as opposed to the varying analog signal) also make digital more energy efficient.
Digital TV supports Dolby 5.1 channel audio (provided you have a sound system that can deliver it), so it is both a visual and an audio improvement over analog. NTSC set the analog TV standards, but digital TV standards are set by the Advanced Television Systems Committee (ATSC).
The FCC mandated a switch of broadcast television from analog to digital in order to reclaim the analog RF spectrum for other uses. It was planned for either 2006 or when 85 percent of households in the stations' markets could receive digital signals. The mandate for full-powered stations to switch over was eventually set for February 2009 and then delayed until June 12, 2009. This freed up 108 MHz of the UHF spectrum at the 698 to 806 MHz bands, which can now be used for other purposes, including wireless broadband. A good bit of it was auctioned off to private companies; 24 MHz was set aside for public safety uses.
To help prevent people from losing access to television during the switchover, the U.S. government funded a coupon program that gave qualified applicants $40 vouchers to buy analog-to-digital converter boxes for their existing TVs. It also provided some funding for public education on the subject. So now, most everyone is watching digital transmissions, even if they still own old analog TVs. There are some low-powered broadcast (LPTV) stations that were exempt from the initial deadline. These are mainly small local stations that provide community-oriented broadcasts. Their deadline for terminating analog transmission is Sept. 1, 2015. Once that's done, there will be no more analog television broadcasts in the U.S.