I believe that yes it does because you are accessing it through dishnetwork.com. I have a bandwidth meter on my router and can see my 2Mbps upload completely maxes out when I try to do HD. I see many posts on here about PC specs. While that can certainly have some effect, I don't think it is the real limiting factor here. I have a Core i7 860, 4GB of RAM, Intel x-25m SSD hard drive and a Radeon 5850 HD graphics card and I still have major HD stuttering problems. Unlike a regular Slingbox, I am fairly positive this is going up through Dish's proxy and back down to you even while at home.
That said, I love this addition to my 722k. It works very well on my iPhone and my Blackberry. On multiple PCs, it works very well on the middle quality setting and only stutters when I try HD. On the mid setting I average about 1800kbps.