Welcome to SatelliteGuys.US, banzai75x!
Caveat emptor Dishus Networkum, or something. "Truly digital" does not simply mean better. For Dish Network (and DirecTV for that matter), it mainly means they can squeeze more channels at less-than-full quality by using the great compression feature of digital video. So you'd be back to that quality-vs-quantity argument. For most customers, it mainly means the picture on most channels is OK most of the time, but not great, while the picture on the rest is crummy, full of compression artifacts. For me personally, yeah it means the picture is not the best, but I enjoy the added functionality provided with digital transmission. Digital audio is more my thing, which you cannot get with analog cable or analog OTA.
So while it's truly digital, that can be misleading to many new customers. Actually that phrasing doesn't make much sense to me, as the nature of "digital" information itself, it's either digital or it's not. Maybe the rep meant Dish Network is an all digital channel lineup, instead of the lower channels still being analog as with most if not all digital cable offerings.
Anyways, on to your questions (if not already answered above by the time I'm done with all this rambling):
1. This depends largely on your local cable headend, and where you are in relation to it, etc. But in general, people tend to agree that [gasp!]SD is usually better with cable[/gasp!]. This seems to be a fairly recent trend though, within the last year or so. Hopefully they will reverse the trend with more satellites being launched in the very near term and thus more space beam capacity.
2. With Digital Home Advantage, which is what I have, the equipment and installation is indeed free. Some will say the equipment has a lease fee that's included in the monthly rate... unless I'm shown some official statement itemizing the monthly base package (AT60, AT120, AT180, AEP, etc.) fee I choose to just not care.

And you just return the equipment at any time if you wish to cancel (no commitment unless you go through most retailers).
3. Can't really help with this one.