1) Why did you support Blu-ray in the first place?
I don't; I just support my need for movies in the best possible format, and right now, that is BD
and HD-DVD, since both are better then standard DVD. And I have been doing this a tad longer then some...
2) If you did so because you thought it was better why would be so willing to use an inferior technology like HD-DVD?

The picture quality is equal, and the sound the same. In fact, the menus tend to load faster with HD-DVD. I have a eight foot screen, and I can't see the difference. Now, that is not to say that the capacity of BD is not better; it is. You can obviously hold more with BD. And I still think, that BD will win, which is fine with me. As long as High Def wins, it's fine with me.
But all in all, again, both formats are better then even up scaling DVD.
3) Why not just up-convert the DVD on your Blu-ray player instead of spending money on a format you thought to be inferior just a few days ago?
I have a up scaling DVD player for my DVD's, I have a BD player for my BD's, and a HD-DVD player for my HD-DVD's. I also have a SACD player for those discs. Heck, I even have a turn table for my records. Point? I have what I need to do what I want. (and longer then yesterday, for what it's worth)
4) In saying that you are also getting an HD-DVD player are you saying that the marginal difference between HD-DVD and an up-converted DVD is worth $300+ and the additional cost of buying the HD-DVD movies over the DVD?
Sure, but again, to each his/her own. It's not like this is medicine. I mean, we are talking about a luxury item that most people can't afford anyway.
5) Lastly, what are you giving up in order to buy this HD-DVD player? In other words what future purchases are less valuable to you than an HD-DVD player today, that were more valuable to you before the Paramount announcement? I'm an economics guy and that is why I ask.
I don't profit from Paramount, and I do profit from Sony. (Stock in the later).
I don't see this is a big deal. In 18 months or so, when the furor dies down, Paramount will be BD again. IF High Def is still around. The war here should not be between HD/BD, it should be both of those against DVD, which is still the massive winner.
We, the High Def owners, are so in the minority here. And this war, if remains unchecked, will kill the infant. The infant being the just beginning High Def format.