I think Blu-Ray is seeing better sales so far, but I hope HD-DVD wins. Ignoring the fact that Blu-Ray has larger discs, I'd like to see HD-DVD win because I think 'Blu-Ray' sounds dumb.
In the end, though, I'd imagine we'll all have combination players except for the silly people who jumped on the bandwagon early. I see it happening in a similar way to the 'big' argument about recordable DVD formats, where all writers support DVD+R and DVD-R and the existence of both types of media on shelves only serves to confuse the holy hell out of the average consumer.
DVD is still beating the crap out of both new formats, of course. DVD had a ton of advantages over VHS (cost of manufacture, digital format - no rewinding, ability to jump to scenes, special features, etc - longevity, quality, etc) and HD-DVD/Blu-Ray only offer increases in picture and sound quality. Sure, they can do silly things like PiP style commentaries, but those aren't all that compelling (and they have been done on DVD in a few cases), and most people don't care anyway. Hell, most people with HDTVs are just watching regular cable squashed to fit 16:9, so I doubt they care much about picture quality, and they're just listening to shows and movies through the built-in speakers, so 7.1 audio isn't going to excite them either.
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