The external Cable Modem is the small external box that connect to your computer normally through an ordinary Ethernet connection. A plus is that you can connect more computers to the Ethernet. Also the Cable Modem works with most operating systems and hardware platforms, including Mac, UNIX, laptop computers etc. The downside is that you can only connect one PC to a USB based Cable Modem. 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. 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.