It is possible that it could be HD. I watch TV shows all the time that are 720p, and they are, that are 1.2GB for a 42minute episode with the 5.1 DD surround in MKV. So to me, it is possible and makes sense that they could do a feature length movie, in like 720p, at around 3.5GB. Now that doesn't say that it is going to be on par with an over the air 720p broadcast at full 3Mhz bandwidth or equivalent Bluray 720p movie. The quality is going to significantly less but it will still be better than a SD DVD recording.
I would like to add too, that for $20 for HD title is BS and a rip-off anyways. I could see paying that for a hardcopy on Bluray but $20 for an even more compressed HD movie, nah don't think so.