I think these new formats ar being introduced too soon. Most people still haven't experienced true HDTV. Once they do, I think you'll be able to sell them on a new DVD player that's "as good as HDTV." Assuming it doesn't cost more than $200, of course.
So who's gonna get to $200 first? Blu-Ray is starting at $1000, HD-DVD at $500. I know where I'd put my money.