Just to add a little flame to the fire. I've been really lucky to see a side by side comparison of both HD-DVD and Blu-Ray. While the differences are VERY minimal in picture quality the Blu-ray has the smallest of edges on that front. The two noticeable differences for me were the storage capacity (Blu-Ray wins) and the speed of the player (again Blu-ray wins). When I say speed I mean how long does it take to put a disc in and start watching a movie.
While I love the more open licencing of the HD-DVD format that really seems like the strongest feature of the format. Otherwise Blu-Ray has it beat all around.
Here is a snippet of a news story on Blu-Ray that addresses licencing as well as who is in on the format.
"The companies that would start disclosing specifications for the Blu-ray Disc format are: Hitachi, Ltd., LG Electronics Inc., Matsushita Electric Industrial Co., Ltd., PIONEER CORPORATION, Royal Philips Electronics, SAMSUNG ELECTRONICS CO., LTD., SHARP CORPORATION, Sony Corporation, and THOMSON multimedia. The nine companies will be called 'Blu-ray Disc Founders", and they will pursue a broad acceptance of the 'Blu-ray Disc" format. "
I think that distribution will be key. Right now the two biggest players are the PS3 and XBOX360. I would suspect that many people are sour on Blu-Ray because the PS3's are so expensive and hard to find. The HD-DVD sales for the 360 have been very slow as my local BestBuy has had a ton of them the last few days with little indication that they were selling any of them.
The next big test will be courtesy of Dell. Dell has started shipping their XPS laptops with the Blu-Ray option. That is a huge distribution channel right there. Also we'll need to keep an eye on blank media manufactures. Remember what a big deal dual layer discs were. Great idea but the discs were just so damn expensive and hard to find.