I've heard from DTV that they have changed they're compression techniques to accommodate the extra channels as you say, but I'm not so sure about the rest. DirecTV is using several birds in three different locations 101, 119, 110.

My understanding is they have no intentions of moving any of the locals that are currently on the 101 bird, but new locals for smaller markets will show up on the 110 bird [Link: lyngsat.com]
. The 119 bird is carrying the HDTV channels and direcTV Paro Todos [Link: lyngsat.com]
Soon, DirecTV will be offering many other ethnic channels off the 110 bird.

If your not happy with the picture quality now, don't ever expect it to get better any time soon. The competition is low and the money is going to the provider that provides the most channels and the picture happens to be better than what you can get on cable, so I wouldn't expect anything to get better unless a new player comes on the market providing all HDTV transmissions, but that can't occur until the market gets saturated with that kind of equipment - probably quite a few years away.

-Jeff