Can Directv deny HD service because of old HD Receiver?

They cannot deny you service on the box, if it is an owned (non-lease) box and its account is clean.

Of course, it will not be compatible with the HD signal format they have been switching to since last year, and have be totally transmitting in since summer this year. You need one of the H2x receivers to get the current HD format they transmit. You can activate the old receiver and use it for SD channels, and its OTA tuner for local broadcast stations from antenna.

If you have had an older HD box for a while, I think they may have had an upgrade deal for a new receiver. Since you just got that old receiver, I doubt you would be eligible for an upgrade deal.

They may have to change the dish size... not sure. It would still be coax from the dish to the box. Coax can easily handle HDTV, cable companies carry HDTV, internet, and multiple (up to 12) phone line on one RG6 coax (just clarifying that since that other guy said you need fiber to the box... rofl hahahaha) Dont' really need an HDMI, but it would be ok. The only negative about HDMi compared to component is that it's a digital connection and it needs to mate with the tv, if it runs in to software issue, it wont work properly. Component cables easily handle 1080i and dont make much of a difference unless your tv is 47" or more. The problem with this whole thing is you don't have an HDTV to start with, so you would have 1080i hd reaching your box in digital and leaving your box with a coax or composite or s-video as 480i analog. You won't see any difference at all in picture quality...

Satellite Companies change all the time both what coding they use or content protection. It is quite possible that the older model may not work. Unlike cable where there is a "standard", satellite companies can use anything they want.