We had Sky, and if you search for my old posts I'm sure there are at least a few rants about how terrible their customer service is, so I won't go into it again here. I get the feeling that all the TV/phone/broadband providers are in a race to the bottom as far as that goes, so it probably doesn't matter anyway.
The thing that snagged me is that they are offering an "any time" calling plan for £5 a month. All calls to the UK and a handful of countries (including the US) are included provided we hang up before an hour is up and call back.
That was a good deal, and worked just as advertised. The only issue we had was waiting for Sky to inform BT that Sky was our long distance provider. It took much longer than I'd expected (about 2 months if I recall correctly), and in the meantime we were making long distance calls thinking they were going through Sky. They eventually gave us a refund on all the charges we'd racked up with BT, but it took a lot of complaining on the phone and in writing before that happened.
2)Has anyone had both and can compare things like the channel selection? What about downtime? What packages did you get? Did you bother with the movie channels?
I can't compare the two, but I thought the selection was pretty good. We had the basic package plus the variety pack, and during the NFL season we got Sky Sports. (They were very good about letting us switch that on and off without penalty, which surprised me.) The movie channels were pretty much the same as HBO in the US; one or two big blockbusters each month with a lot of crap in between, so we didn't get them. (We'd use the box office pay-per-view if we wanted a movie; the selection there was good.) There was very little down time; maybe once or twice in 3 years we'd lose reception, but never for very long.
3)How good/bad is their free broadband?
We lived a long way from the exchange, so we only got about 1.5 Mbps, but that wasn't Sky's fault. There was no USB port on the router, so we couldn't print remotely, which was a small bummer, but otherwise it was fine.
4)Customer service? It can't be worse than Virgin, right?
Goddam awful. We had constant problems with our Sky+ box (the non-HD one) and they wanted us to pay £65 to have someone come fix it (i.e. hand us a refurbished one out of the van). I asked if we could get the fee waived as we'd been customers for 3 years, but no. The only time they offered to have someone come out for free was when I called to cancel the service completely. It took 20 minutes of very firm "no" from me before they finally quit trying to keep me as a customer. If they'd tried that hard earlier they might've been successful.
5)Anyone cancel a contract early? What sort of penalties did you suffer?
Our initial contract was long over when we cancelled, but they still charged us for one month for not giving them 30 days notice. They're total bastards.
Hope that helped and wasn't too ranty.