I switched from cable to satellite 8 years ago.
The reasons for me were that my "analog" cable was bad - reception was spotty, picture was fuzzy. Digital didn't exist at that point for cable. But all satellite channels come through as digital. Satellite picture looks so much better than analog cable.
I do get interruptions a could of times a year. It does depend on your location. I've never had an interruption longer than an half an hour. Snow very rarely interrupts - only in a very strong blizzard (not from a couple of inches sitting on the dish). Its usually hurricane type conditions. My receiver has an antenna attachment so I can plug in rabbit ears for channels that satellite doesn't provide, or if the reception goes.
Heres the answers to your questions:
Do I need to connect the receiver to a phone line? Why?
If you don't use Pay Per View, then you don't need this. Your provider may have the ability to order PPV without calling an operator, by using a modem built in to the receiver. I never use this anymore. It is handier than calling on the phone and waiting on hold for an operator.
Can I use the existing cable television wiring or is rewiring / additional wiring required?
Satellite cabling is different than regular cable coax, in that it passes electrical current to the satellite dish's receiving head. You need new cabling.
* Can I get my local broadcast network channels?
Depends on the offering of your provider. My provider gives me 95% of the channels I could get by antenna and many many more. There are some anomolies. I get Fox Rochester instead of Fox Buffalo, though Buffalo is closer to Toronto. The added value, and something I can't get from cable, is I also get all the major networks in time zones across the country. I don't get every CTV, CBC or Global station across the country, but I do get a couple in each timezone, and that gives me options for timeshifting. If I miss the beginning of a show, I can wait till it comes around again. Even some of the specialty channels now have east and west channels (History, Showcase etc).
Much of what you want to ask is around packages - you want the flexibility to drop or add channels easily. The more flexibility the better.
As for location - they should be able to quickly tell you - if you are on the side of a mountain, you may get great reception or none at all depending on where the actual satellite is. Note that the difference between great and good is not visible - digital is digital. Medicocre reception means you may get dropped more often.
I installed my own BTW. But if they offer free installation, take it.
James