Unlike, Beta v VHS there will be universal players that do both formats. Walmart's percentage of the market is huge. As for Walmart's customers not being market makers just remember Joe Six Pack chose VHS over the higher picture quality Beta. Don't forget the international market's influence on if one format comes out on top.
Personally, I expect the high def disc market to be a niche product like LaserDisc, SACD, and DVD-A. Many can't tell that much difference between a regular DVD and high def discs. You need a 1080p set to get the most out of Blu-ray/HD-DVD. The penetration of HDTV much less 1080p displays is still fairly low. Joe Six Pack hasn't likely even run Avia/DVE on his HDTV much less had it calibrated. Then he's still watching so much SD on his HDTV that standard DVD looks really good in comparison.
Personally, I expect the high def disc market to be a niche product like LaserDisc, SACD, and DVD-A. Many can't tell that much difference between a regular DVD and high def discs. You need a 1080p set to get the most out of Blu-ray/HD-DVD. The penetration of HDTV much less 1080p displays is still fairly low. Joe Six Pack hasn't likely even run Avia/DVE on his HDTV much less had it calibrated. Then he's still watching so much SD on his HDTV that standard DVD looks really good in comparison.