Two different samples: One is a national sample, which contains about 9,000 meters inside your TV.
The second is local where the country is divided up into 210 DMAs. This is a combination of meters and diaries.
Anyone with a TiVo or a DirecTV box is supplying viewership data as far as I know. Whether or not Nielsen uses this info is another matter.
Well, I only got a C in statistics, so I'm no wonk, but it sure seems like there's something wrong there somewhere, or the nets would be producing more shows that people would actually want to watch.