Since this was designed by Microsoft it sound a lot like the $10 that dishplayer owners have to fork over to dish to get the recording capabilties. I think the $$ goes right to microsoft. On the UltimateTv website here is what $10 gets you..
BASIC ULTIMATETV SERVICE: $9.95/MONTH, INCLUDES:

· Live TV Controls (live pause, rewind and fast forward, skip ahead, instant replay)
· 35 hours* of Digital Video Recording
· 14 day searchable Advanced Program Guide™ for DIRECTV® programming
· Picture-in-picture: watch and record two live shows at the same time
· 3 hours per month of Internet connect time for Internet on TV and interactive TV features
· 6 e-mail accounts
· Automatic upgrades

I am very happy that dish's new hardrive receivers have no monthly fee.. Looking to get one soon