They looked for evidence that greater exposure to television lowered test scores. They found none. After controlling for socioeconomic status, there were no significant test-score differences between kids who lived in cities that got TV earlier as opposed to later, or between kids of pre- and post-TV-age cohorts. Nor did the kids differ significantly in the amount of homework they did, dropout rates, or the wages they eventually made.
The 'they' in the quote are Matthew Gentzkow and Jesse Shapiro, economists in the University of Chicago, which is also the home of one of the authors of Freakonomics, Steven Levitt.
I would still restrict the daily TV dosage for our four-year old. The reason is simple (and has nothing to do with studies or future test scores): many shows on the Cartoon Network and Pogo are so violent (particularly the evening shows) that we can see their effect on him. What is worse, even if we restrict his TV watching to only the shows on Tiny TV (with things like Noddy, Pingu, Oswald, Bob-the builder, etc), these channels pump him with ads for the more violent shows (and Power Rangers is horribly, sickeningly violent) to be shown later. And these ads themselves are quite scary.