Internal Cable Modem
The internal Cable Modem is typically a PCI bus add-in card for a PC. That might be the cheapest implementation possible, but it has a number of drawbacks. First problem is that it can only be used in desktop PC's. Mac's and laptops are possible, but require a different design. Second problem is that the cable connector is not galvanic isolated from AC mains. This may pose a problem in some CATV networks, requiring a more expensive upgrade of the network installations. Some countries and/or CATV networks may not be able to use internal cable modems at all for technical and/or regulatory reasons.
Interactive Set-Top Box
The interactive set-top box is really a cable modem in disguise. The primary function of the set-top box is to provide more TV channels on the same limited number of frequencies. This is possible with the use of digital television encoding (DVB). An interactive set-top box provides a return channel - often through the ordinary plain old telephone system (POTS) - that allows the user access to web-browsing, email etc. directly on the TV screen.
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