There's next to nothing done "server side" here. The shows are recorded on the customer's DVR. They are stored on the customer's DVR. How / where Autohop takes place has never been disclosed, has it ? No one knows if they're using existing markers that are by design there for commercial insertion, if there are employees of Dish who playback the PTAT-recorded shows and add markers at the start/end of commercials, etc.
Well thanks to this lawsuit we will probably get a very detailed description of how it all works.