It's neck and neck right now as most have said.
One advantage Blu-ray still has is around 20gigs more storage in it's dual layer discs. Blu-ray max = 50gigs. HD-DVD max = 30gigs. And Blu-ray may have a higher bandwidth, more data per second, than HD-DVD.
Most movies can fit fine on 30gigs with extras. What comes in question is 3hr movies and uncompressed audio. I don't mind there being a 2nd disc for special features, nothing new. And the more bandwidth. They try to be as efficient as possible, so most the time it never reaches the max bandwidth, usually it's at half with peaks here and there. Just depends on the movie. But because Blu-ray has more bandwidth, then it can be said it's shaper than HD-DVD technically, but in all practical real world stuff, I would say no. It can't be noticiably sharper for most movies, things are already so clear. You'd have to take screenshots, then magnfiy little sections to look at each pixel to find a difference. And movies that are on the both formats use the same exact computer file, thus they are a perfect match. Even a movie like Happy Feet, a good 2hrs or more, the entire disc was 14.9gigs, and it was razor sharp, flawless, and uncompressed audio.
It was odd at the begining. HD-DVD came out first with a player as cheap as $500 at 1080i (pretty much 1080p when given to a good tv). And the movies were rated highly, no flaws, really clear. All using 30 gig discs except for combo discs. While Blu-ray, started at $1000, and most the launch movies looked soft, some really bad like Fifth Element, and only 25gig discs. Often featuring less or no extras that the DVDs had. Twice the price and didn't look as good, 6 months later, there were only a couple 50gig movies that still didn't look that great.
Then, HD_DVD had new features, like in movie experience with the picture in picture, and other advance features that came first with the Tokyo Drift, which was also the first 30gig combo DVD disc. And the menus have been nice to work with too. While Blu-ray was mostly basic still, as they had not finalized the advance features yet. This also meant most early players would not support them when they do get them out. One movie did have a picture in picture, but they had to redo the entire movie like that, double the space. And many releases on HD-DVD have more extras than Blu-ray, and many Blu-ray movies have been delayed because of the advance features that might not even work for most people.
Overtime both have fixed their flaws and are neck and neck. HD-DVD still kills on price with $100 deals recently. Some of the new java features on blu-ray actually have odd loading times. Like Ratatouille warns a 30+ second black screen before the menu appears. I thought it froze at first. And the menu for extras worked bad, it would branch out to the right, and after watching a extra, it would come back with the most the menus missing until I moved through them. And Surf's Up atleast had a loading surfboard bar. And the pinball game it had seemed buggier than online website games. Was that what we were waiting over a year for? The was even part of the menu that got offset and faded and stuck in the black bar on Surf's Up while watching the movie, almost invisible. This movie took only 5 seconds or so to load on the PS3, but I heard it took longer on other players.
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