It says the "Deep Hound" replaces "Dire Wolf" companion. I thought the changes were only cosmetic, but it has 10 HP; as opposed to the 29 the Dire Wolf has (at level 2)... What gives?

The changes aren't only cosmetic - The creatures actually have all-new features, stats and skills (which is pretty neat, go custom scripts!). The changes aren't specifically listed anywhere as far as I am aware, but what's written next to the characters on the webpage should give you a rough idea of what to expect.

Also, expect most animal companions, familiars, and the like to be weaker than normal. This was done to help balance the server.

Though in critical situations they can be quite an asset if chosen and used wisely!