Bookworm, to avoid too much repetition, can I refer you back to this thread:
threadid=134758
The reason that Mode S achieves reduced frequency congestion on the surveillance frequency is because the radar head can selectively interrogate individual aircraft. For example Mode S can reliably interrogate each aircraft in a close formation, or every aircraft in a holding stack, something that Mode A/C struggles to do because of mutual interference. Indirectly, enhanced surveillance also reduces congestion on a Comm channel, because instead of the controller saying "what is your present heading?" he can just read it with Mode S.
As mentioned, all Mode S aircraft still need to squawk a traditional 4096 code. The code is required when you are being painted by an older Mode A/C ground station. It is also one of several pieces of data provided to the computer in a Mode S equipped air traffic control center. Because the computer also has access to Flight ID, aircraft address, and several other parameters, it can more easily distinguish between aircraft, and therefore two flights could carry the same squawk code in the same sector with no chance of confusion. This therefore alleviates Mode A code shortages.
As an aside, there is still a pretty interesting code allocation problem that is probably taxing the brains of a few planners and mathematicians. Although quite a few of the key ATC en-route sectors in Europe will be Mode S capable within the next year, it will be MANY years before the last of the Mode A/C sites is phased out. Until then, the computer that allocates squawk codes will still need to ensure that flights that criss-cross the patches of Mode A-only coverage do so with unique squawk codes. When only the fringes are left, it's possible that you'll need to change squawk code to a locally assigned value as you fall off the edge of Mode S coverage into the Mode A world. But, despite your comment about Eurocontrol guidance, I've not heard anyone brave enough to estimate a date for when the last Mode A ground station is switched off.
