501s can still be activated.
721s are dual tuner, SD only DVRs that are MPEG-2 capable. They cannot do MPEG-4 or 8PSK, and cannot be updated to do so. They have an inordinate number of HDD and power supply failures. There never were huge numbers of them out there. But when they work, they work great. They also may be used without paying the DVR fee (same for 5xx series). If your 721 is authorized and in service and breaks today, they will replace it with a 522 (or possibly a 625). But you will have to start paying the DVR fee.
Years ago, Dish announced plans to go all MPEG-4 (& 8PSK, I believe). No timetable was set. All HD was to be shifted first. The last bit of that will happen 8/1/08. After that, it's all speculation. When this business first came out, we speculated that the next step would be to start at the top, with channels unique to AEP converting to MPEG-4 first. And maybe premiums such as some or all HBO channels, etc.
It would be a very long process, taking years, due to the number (somewhere in the millions) of MPEG-2 only boxes out there. We expected at some point, all new subscribers would be provided with MPEG-4 capable boxes only. That did not happen. Instead, it looks like a new service, currently referred to as Eastern Arc, will be created. It will require MPEG-4 equipment. PQ is expected to be better. Perhaps it will have a few channels not offered to people in the old plan (at some future date). EA will be opened to new subscribers only, at first. At some point in the future, they may open it up to current subs. No doubt there will be some incentive, and some costs, involved in such a move.