I'm guessing that they allow the Media center to control a Dish STB via the ethernet and stream the output via sling technology back to the Media center.
I kind think that Dish loses control of their User Interface by giving control of it (or more accurately.. completely bypassing it) to Microsoft. Controlling the end users "portal" will mean big money in a few years, especially or ad revenue. This will be even more acute for Dish when many of networks have "online" presence and you no longer need to subscribe to a service provider to watch them.
Right now Microsoft needs service providers like Cable companies and Satellite companies to lend value and exlusivity to its Media Center portal. If you had to go outside of your "Xbox" or other Media Center portal to watch TV, then they wouldn't have you exclusively. This just strikes me as familiar with Dish and SBC's customer arrangement. SBC needed a Video partner so that they could counter cable's triple play bundles. Once they had their own Video service up and running, Dish was cast aside.
My best hope for Dish would be to try to seize on the user portal while they can. They have 13+ Million [correct me if I'm wrong] and growth is stagnating. When people are going to start to be able to get their favorite shows off the internet (legally), there will be less of a reason to cough up $100/mo for Dish or other MSOs. Media Center will of course already have streaming content seamlessly integrated and you'll simply choose to watch your Star Wars Clone Wars online, instead of on Cartoon Network. Of you'll watch the Streaming NFL Network game instead of paying for the NFL channel on Dish.
In about 5 Years Satellite and Cable TV will be as relevant as copper phone lines. Sure they work, sure older people will still use them, but most will be getting their entertainment online. Cable and Phone companies will be ok since they control the High speed internet. Not sure how D* and E* can counter without some kind of wireless internet partnership. Even then, how much can wireless internet stream simultaneous, and what about the lag on channel changes?
I see bad things here.