You must have something setup wrong. I record most of my programming on TV2, and all the shows I've played back on TV1 are in HD (if the channel itself is in HD of course).
So I spent some time yesterday checking and testing everything on my 722's setup. I've been in Dual Mode since day one (late August '09) and originally my Record Plus was set to default to TV2, which is actually just the coax feed input to my DVD recorder. It was that setup that recorded two HD programs on the TV2 default and when played back on TV1 (my main HDTV), they were in SD. After that unfortunate event, I changed Record Plus to TV1 and never attempted to record to TV2 again, until yesterday.
Yesterday I went through the menu on TV1 and TV2 and checked all of the settings. Everything was as I and the manual thought it should be, so no changes were needed or made at that point. I then tried recording a couple of on-going HD programs, designating one to go to TV2 and the other to TV1. That worked and both came out HD.
I then scheduled a couple of one-time timers for a couple of short, afternoon HD programs and the software assigned the first to TV1 and the second to TV2. That also worked and both came out HD.
I then reset Record Plus to default to TV2, as it had been originally set. I again scheduled a couple of one-time timers for short, afternoon HD programs and the software assigned the first to TV2 and the second to TV1, as it should have done. Again, it worked and both came out HD.
So I setup my Thursday night timers for the shows I really wanted to record for later viewing. The software assigned the recordings to TV2 and where there were overlap conflicts between satellite channels, the software assigned the second timer to TV1. I checked this morning and everything was in HD.
So yes, now I can record 2 satellite HD programs and one OTA HD program simultaneously and watch a pre-recorded HD DVR event at the same time on my 722.
All I can come up with as a reason for the first time failure to record in HD on TV2 is that my setup was very new and seemingly still getting a lot of downloads from Dish every night, as well has now having been soft and hard rebooted several times. Maybe in the initial setup there were software glitches that were subsequently corrected by a download or by one of my reboots. Whatever, it now works as others have said it is supposed to and my wife appreciates the additional flexibility since she tends to go over to Starz or Cinemax to watch movies right while some prime-time evening drama series is being recorded.