08-23-07: FreemandThat may be true for now, but I don't think it will stay that way.
I concur with Elizabeth that hd dvd is not necessary to main stream. Hd dvd will have a nitch market like laser disc, sacd, dvd audio and s-vhs.
For one thing, people are getting hip to better image quality in the home. DVD showed the public they could get a better picture than broadcast or cable. Look how DVD caught on and replaced VHS in a few years.
Second, the FCC intends to make HD the broadcast standard in a few years.
Third, if you want a cheap, std. def CRT-based TV these days, you almost have to go to a pawnshop to get it. Anywhere you go--Sam's Club, Wal-Mart, Circuit City, Sears, or Best Buy, you are bombarded with the look of 42" to 65" 1080p displays. The prices of hi-def are falling precipitously.
I bought my first new TV in 1982--it was a 19" mono Sylvania color TV for $479. Adjusted for inflation, that's $1050 in today's money, which will buy you any number of LCD, plasma, and RP DLP displays up to 50" or more.
Once people buy these and up their cable subscription for HD programming, they will be disappointed with what their DVDs look like. Where before DVD offered the best picture in the house, now it will be the worst.
By then, they'll be able to remedy the situation with a $250 Toshiba HD DVD player, or a sub $199 player from Wal-mart, (or they could choose Blu-ray) which will not only play hi-def DVDs that exceed the visual quality of cable HD, they'll also upconvert their present DVDs to make them watchable.
If they join Netflix, they'll be able to rent HD DVD or Blu-ray titles as soon as they're produced, at no additional cost to their membership.
Once they're hooked on the higher image quality (and really, who wouldn't be, once you get it in the house), how long do you think they'll choose to buy std. def DVDs over the hi-def versions just to save a few bucks? Historically, the buying public has embraced spending a little more to get better image or sound quality (assuming it's on a convenient, readily available format).
They did this with LP over 78, CD over LP, and DVD over VHS. Why not HD DVD or Blu-ray once they have the hardware in the house?