Local TV stations can come in via your sat dish and/or via an OTA (Over The Air).
Locals that come from your sat will appear just like any other sat program. However, OTA locals will appear on a yellow background.
Sat locals are determined by the your DISH Service Address ZIP code. For example, if your Service Address has a Chicago ZIP code, then all the Chicago stations will appear in your program guide. However, if you drive far enough away from Chicago, you'll be unable to receive the Chicago stations even though these stations will still be displayed in your guide.
As you travel you can call DISH and have them change your Service Address to where you're currently camped. Once this is done, the list of local TV stations available for your new ZIP code will appear in your programming guide.
To also get OTA locals, they must be scanned in. For DISH VIP receivers, press MENU and select System Setup then Local Channels. Then Scan Locals.
BTW, scanning OTA locals can also get you the "sub channels" (4-1, 4-2, etc).