I have a Dish VIP922 and have pretty much the complete package of movie channels. My TV is the Pioneer Elite Kuro Pro-151FD 60" monitor. I've been a Dish customer for more than 10 years. This is an interesting topic and have often wondered about it myself. I cannot state with any certainty that the Dish signal that is sent via satellite to my Dish is 720p but I very strongly suspect that it is. For those of you that believe that there is little noticable picture difference between 720p and 1080i resolution setting I can offer some input. If you have a source capable of sending an uncompressed 1080i signal vs a 720p signal to a TV monitor that is capable of resolving either of those signals in native mode, then the 1080i signal will look markedly superior to the minds eye in terms of clarity, detail resolution, motion and dimension. This then raises the question; is it better to set my TV resolution on the dish receiver at 720p or 1080i, given that the evidence is strong that the native signal is indeed 720p?
I believe I understand what is going on in the dish receiver / set top box itself. First you have the decompression engine, then the scaling and output function, which on the older models, say, VIP722 for example was done on two seperate chips. As I understand it, the newer models, including the VIP922 and Hopper combine those functions onto one chip. I am convinced that for all but PPV the programming is broadcast by dish at 720p. If your TV is capable of resolving 1080i signals, and given the dish allows you to select 1080i as the output (due to internal scaling of the 720p signal) I would still suggest that you carefully observe the performance of your dish programming picture with the dish resolution set to 720p. In many cases, you may find suble but important improvement in picture by selecting 720p. By using the internal scaler on the VIPxx or Hopper as opposed to the scaler on my TV i find that rather than an improvement, there is a additional noise overall and false edge contouring which diminishes the quality of the picture. For instance, watching the Yankees Vs Tigers on TBS, the 720p picture looks more still and noise free. It looks slightly clearer, indicating that this is the native resolution of the signal. Even a t 720p the picture looks good. I am confident though that it would look much better if the broadcast signal was a true 1080i and I could watch it at this resolution.
Also, i will admit that having owned the VIP722 in the past and since having upgraded to the VIP922, I much preferred the picture of the 722. I won't go into that further though because that way lies madness.
So bottom line, yeah I do believe all but PPV (maybe) or perhaps some select programming such as on the Blockbuster channel is broadcast decompressed 720p then scaled at the set top box. I also will note that the Dish picture has diminished somewhat over the past several years, where I think that Dish several years ago did in fact broadcast at true 1080i especially for the VOOM channels which were glorious in HD. The Dish picture is simply not as good as it was in the days of VOOM IMO.