I've been using the term HD-lite to refer to the combination of lower resolution and lower bit rates. Having both or either is HD-lite to my eyes.
I do agree that a 1440x1080i picture that is getting 16Mbps of bandwidth will yield a pretty good image - unless they screw it up somewhere between the source and my TV. It won't have the razor sharpness of a true 1920x1080i with good bandwidth, but at least it will be fairly sharp and without all of the blocking, contouring, and blurring that is plaguing a LOT of E*'s HD channels right now.
Trouble is that bandwidth is the problem area for E*. I believe resolution is reduced in order to save bandwidth. That is, a 1280x1080i video requires less bandwidth than a 1920x1080i video. A 1280 channel at 10Mbps will have fewer obvious compression artifacts than a 1920 channel at 10Mbps because the 1280 is being compressed less - there is less information to compress.
Thus E* is looking to reduce the bandwidth given to each HD channel. Reducing resolution to 1440 but not reducing bandwidth makes no sense from E*'s perspective. They want to put 3 HD channels per transponder. So they down-res, use MPEG4, and squeeze bandwidth to get to their goal. Or they leave the resolution at 1920, use MPEG4, and really squeeze bandwidth - which means the 1920 channel will be rife with compression artifacts.
I don't see anyway to lobby E* effectively to keep bandwidth rates high, unless a LOT of subs complain about the compression artifacts. The cost to E* to keep bandwidth high is to go back to 2 HD channels per transponder. That's a very high cost to them and they won't go there unless they have to.
The other path is that MPEG4 can become much more efficient, which could mean that fewer compression artifacts would be present even given lower bandwidths. So the hope is that PQ would be pretty good even with 3 HD per TP.
However my crystal ball says that if E* can get the buying public to accept and be happy with HD as it is presently being served, that what will happen when MPEG4 improves is that E* will go to 4 HD per TP and we will simply get more of what we are getting now, at perhaps an even lower quality.