The satellite dish receiver is the end component of your satellite television equipment. There are four basic tasks that are performed by your satellite dish receiver:
The satellite receiver unscrambles the encrypted signal sent via radio waves. The signal is encrypted to protect against people illegally accessing satellite television. A decoder chip within the satellite receiver unscrambles that signal so you can view the television programming.
The satellite receiver keeps track of any pay-per-view programs and sends the information to your satellite television provider for billing purposes.
The satellite receiver also converts the video format for the signal. The signal is sent to your satellite dish in a digital MPEG-2 or MPEG-4 format, which standard televisions cannot use. The satellite receiver converts the digital signal into a format recognized by your television. In the United States, it would be converted to National Television Systems Committee (NTSC) format. It can also convert it to a high-definition signal.
The satellite receiver also extracts individual channels from the larger satellite signal. As a subscriber to a certain provider (DirecTV, DISH Network, etc.), you only have access to channels they offer at the plan you pay for. The satellite receiver extracts the correct channels from the larger bulk of channels. In addition, whenever you change the channel on your TV, the satellite receiver changes which channel it extracts from the signal.
The receivers may have other features as well, such as recording shows, presenting a picture-in-picture display, parental locking, and more. Or, if you would rather, you can always think that the satellite receiver is magic and don't think about what it does and doesn't do. I find it's easier that way.