First, to answer Natalie's question, no, I wasn't in Toronto, I attended the record show in Edison, NJ at the Raritan Center last Sunday. Some vendors were really overpricing their offerings, but others had a nice selection of classical and popular music, many for $1 per album. I actually picked up 4 or 5 classical boxed sets for $1 per set, on London, RCA (Red Seal), and Columbia -- all in very nice condition. :)
Rcp, as yet my HT system pales in comparison to my 2-channel systems. Yet, considering that I only have about 1/25th of the money invested in HT that I do in 2-channel gear, I am quite pleased and intrigued at the level of performance my HT provides. I can't help being a little curious about how it would sound if I added better quality speakers, amps, and maybe some tubes in the signal path. In spite of the digital processing going on I get very clean and detailed reproduction with amazing dynamic range, no doubt due to the higher resolution that DVDs provide. If more high-quality software becomes available it will be interesting to see the potential that the multi-channel approach offers. Here and now, it's a real kick for watching movies. That much is undeniable.
I think you are right that there should be more hybrid discs released on SACD and that this could ease the transition to that format for the masses. The only catch is that the dual-layer hybrids cost more to produce than the SACD-only discs and would drive up costs to the consumer -- which would deter sales. So that may be a double-edged sword. Basically, if the prices of the players come down just a bit more (I'm sure they will) and the list of available titles starts to blossom, then SACD could succeed.
By the same token, it has been proven time and again, that the mass market cares more about low prices than it does about the quality of reproduction. So, the appearance of $200 DVD-A players could spark buying if software titles become more abundant. Unfortunately, I think that in the long run, whatever format offers the lower-priced software will dominate the mass market. My guess is that the competing camps know this and will make every effort to keep the prices of their available software very similar. In the future we will probably see universal players that will play discs of all formats, with the various formats coexisting, each having its respective share of the marketplace. I don't know if that's good or bad, but it appears to be the way that we're headed.