Right now HD Media is for early adopters. Early adopters tend to be the people who are willing to pay more for the hardware and software.
The CE companies and studios have needed a new cycle for a couple years now - DVD players cost $30 and DVDs cost under $10. In order for any money to come back to the studios and hardware manufacturers it was time for the next generation.
HD DVD is trying to jump forward a few years and put out inexpensive hardware. They can do it because it is basically only one company and Toshiba is willing to take a loss. But notice that the other CEs are with Blu because they aren't willing to lose a chance to have a few years of profitability on HDM.
In terms of discs - you could buy the HD DVD player for $299 or whatever, but the discs are actually generally more expensive or the same price than Blu. Retail is usually at least $29.98 or $34.98 for a combo so the cheap player price won't help you for long.
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