For what it is worth, I have experimented and there is virtually no difference (just a slight softening through Dish sat 129--Mpeg is lossy-- that I think is even an improvement of PQ as it handles fast motion better from sat 129) in PQ between my OTA running directly into my HDTV or the OTA going through the 722 or viewing L.A. Local into Local (LiL) from the Dish 129 sat.
Others in other DMA's have complained of significant difference in PQ when connecting the OTA directly into the HDTV compared with the OTA through the 722, and perhaps a greater difference when viewed from their LIL satellite. I have no explanation as to why they see a significant difference when OTA direct to HDTV or OTA via 722, yet I don't. However, as to the difference when compared to satellite LiL, I do believe that Dish has always, and continues, to provided more bandwidth to LA LIL's simply because of the very high penetration of satellite (largest in the nation, I think) with Dish a very heavy presence, simply to avoid the huge overload of phone calls that would overwhelm their centers if the PQ were ever as bad as reported by many of our good friends in smaller DMA's and rural areas. It's about numbers.
The PQ on Dish Los Angeles LIL SD is pretty good (channel 9 stinks, but they are supposed to fix that this month) and the PQ for Dish Los Angeles LIL HD is excellent! Yes, excellent, nearly as detailed as the OTA directly into the HDTV, for our good friends in other DMA's who are putting up with disappointing LIL PQ's and shouldn't have to. We'll have to see how long the great LA HD LIL PQ lasts.