I'm not a techie by any means, so I'm not sure this addresses your concerns, cybrvanr, so please don't laugh if this is kindergarten-level for you! It's from the HD Radio website:
"Ever wonder how technology can split the radio signal into analog and digital channels and then transmit it over the existing AM/FM bands? It’s a process known as In-Band On-Channel (IBOC) Broadcasting. It’s DIGITAL, and it’s FREE.
Digital Broadcasting
HD Digital Radio supports CD-quality sound as well as song titles and artist names. And because the digital signal piggybacks onto a conventional broadcast signal, it is free to the listener.
The Power of Free
With HD Radio, broadcasters can use the current radio spectrum to transmit free analog simultaneously with new higher quality digital signals. This eliminates the static, hiss, pops and fades associated with today’s radio caused by conditions known as multipath, noise and interference.
Transitioning Out of Analog
With IBOC-based HD Radio technology, radio receivers and other consumer electronics will receive traditional analog broadcasts from stations that have yet to convert and digital broadcasts from stations that have converted.
Current analog radios will continue to receive the analog portion of the IBOC-based broadcast, allowing for a smooth transition to a digital world. In fact, specific features have been designed into HD Radio-supported receivers to improve the existing analog reception during the "Hybrid Mode."
As the market reaches maturity, broadcasters will transition out of analog broadcasts and offer "all-digital mode". As a result of our digital architecture, enhanced services such as increased data capacity, surround sound or other multicasting solutions can be made available across this unused bandwidth."
