Give that man a cigar! I believe you hit the nail on the head.
What I read here is...
When Dish starts broadcasting MPEG4, current customers with MPEG2-only receivers will not be cut off. They will continue to get all the channels they get today with no interruption.
New channels will be added in MPEG4, and the new receivers required to receive those channels will be both MPEG4 and MPEG2 so that once you are upgraded you will be able to receive all the new channels and all the old ones that are still in MPEG2.
What I didn't read, but have always assumed is...
Once they get all receivers in the field swapped by one method or another, they will eventually cut off all the MPEG2 and only be using MPEG4 across the board for all channels. But during the process of conversion they don't want to lose customers so they will keep both technologies active as long as they can.
Sometimes, telling people too much detailed information when they don't understand how things work anyway, just adds confusion where there didn't have to be any.
Thee is no way current MPEG-2 receivers can process MPEG-4 streams. E* would have to either duplicate programming in both formats (not likely) or offer to swap receivers for those who want to subscribe to the new programming (read: the rest of the "VOOM Originals"). I'm willing to bet that E* will have a special offer that goes something llike this: A free MPEG-4 upgrade with a 1 year comittment to the VOOM originals.