Blu-ray or HD-DVD?

Neither. (Yet)

Technologically, they are close enough that it doesn’t matter which one wins the "format war" but there are reasons not to jump on the bandwagon just yet.

1) There is a reasonable chance that one will win and the other will die so that should give a consumer pause.

2) There is also a possiblity that neither will win. Some "experts" think video on demand and internet downloaded movies will take over all DVD formats before the new ones become viable. They’re wrong. Just remember these experts have been talking about video on demand since the cable modem was invented – back then it was just a few years away… They are also wrong that customers don’t want to own things. For the same reason the "renting software" concept is going to fail, people don’t trust big companies to hold all their possessions for them. Because their is nothing to stop them from deciding "oh this month viewing your movies costs twice as much".

If a movie service could replace owning DVDs it already would have. Think about how many people live within walking distance of a Blockbuster? And how many of those people still own DVDs? Exactly. Video demand might kill Blockbuster, but it’s not going to off personal movie collections.
3) There is a STRONG possiblity that this won’t take meaningful hold on industry any time soon. I remember back in 1996 when people wondered if they should even buy a regular (non-HD) TV since it was about to be obsolete. Let’s see, 10 years later we have like 1/3 of TV being sold are HD or "HD ready" (I talking all TVs not just the big ones where HD sets have overtaken their 4:3 ratio brothren). Not to mention all HD programming out there. There aren’t nearly enough HD channels available yet and even fewer channels that actually broadcast fully in HD. So keep that in mind as you are considering the need for an HD-DVD player (or Blu-ray).

There actually have been higher picture quality DVDs around for while, but most people that are movie collectors haven’t even heard about them. What you didn’t go replace your entire collection with Ultra DVDs? You didn’t even need a different player. Hmm. Now the counter point to this is that progressive scan DVD players were adopted quite quickly. This was largely due to the fact that once you’ve dropped three large on a plasma, a few dimes on a new player is less than the sales tax.

4) Price. Price. Price. A HD-DVD player will set you back $400 and a Blu-ray player $600 – even more if you buy them at a local retailer. Now if you’re going the Blu-ray route I would suggest the PS3 since it also costs $600 and includes a gaming console with your Blu-ray disk player. ;) If you aren’t getting the PS3 I would recommend waiting until next year when players supporting both formats will be out and by next Christmas the prices should be a lot closer to the sweet spot of sub-$300.

So the long and short of it is, if you can help it, don’t pull the trigger on a new DVD setup for another year. By then there might enough hi-def movies out to actually justify it, though I don’t expect fully conversion to the new formats until Christmas 08.