One thing to keep in mind is that MPEG transport streams are different than MPEG data. MPEG1 and MPEG2 are different protols for transmitting data encoded using the same format (MPEG1 was meant for files, like on a DVD, MPEG2 is meant for live video over a network so can recover better from errors). I'm pretty sure you can transmit MPEG4 data over an MPEG2 stream, though I think it also defines an MPEG4 protocol (I hazily recall it being loosely based on the Apple QuickTime format - the newest QuickTime format is really the same as MPEG4).
Most of it is decoded into an uncompressed digital format well before it gets to the consumers - at the moment. I do expect all TV to get delivered over the Internet in some way eventually. Maybe like iTunes does it, maybe subscription based streaming video, but once people find the luxury of watching good programs any time they want, I can't see them going back - and personal video recorders (like Tivo, growing in popularity) are just a way of making broadcast cable pretend it's on-demand video for a while.
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