Means the existing receivers won't hiccup when they see Mpeg4 H.264 in the stream, not that the existing receivers will decode it and make a picture.
You'd think. Compatible certainly doesn't necessarly mean capable. But notice the use of words when he says "soon-to-be-deployed compression algorithm will be 'reverse-compatible' with DishNetwork's existing installed base of MPEG-2 receivers" and "launch a new product line with MPEG-4 capability and MPEG-2 reverse compatibility". If you take the first statement and apply it to the second statement, it means that the new MPEG4 signal will be READ by the current MPEG2 receivers. Perhaps the new MPEG4 compression algorithm is MPEG2-hardware friendly by software and requires a new piece of hardware for the MPEG4 receivers to read MPEG4 in full compression. I don't know, I'm not an EE so that's my guess on what's being said.