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Quality depends on what you're watching. Normally nothing below 720p.
You absolutely don't have to upgrade your internet. Providers will tell you if they know you're going digital, just to squeeze a few more bucks out of you. I highly recommend sticking with your current plan and testing that out with the new services before bothering with upgrading your internet. If it turns out to be slow, you can always upgrade later, and that's something they just switch on their end it doesn't cost anything.
I've not used MLB.tv in a long time, and when I did it wasn't Xbox. Not sure about that.
Hulu with LiveTV comes with an online DVR service. But it's only 50hrs worth. They keep it low because for an extra $15 you can upgrade to unlimited DVR. HuluTV also limits the number of streams to 2 at a time, so keep that in mind. You can upgrade that as well for another extra fee. Hulu kind of nickel and dimes you like that.
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