I recently attented one of the Toshiba demos of HD-DVD.
I thought the picture was acceptable in most cases.
However, I noticed some severe contouring when it came to displaying subtle gradients. This was most noticeable in the King Kong trailer, with the blue skies, clouds, fog, and even the spotlight against black behind the names on the credit screens. This is usually associated with a bit rate that is not high enough to properly render the gradients with smooth tones. This artifact can be seen on DVD titles that are encoded in a lower bit rate.
I sincerely hope that this phenomena will be addressed with the Blu-ray camp and the fact that Blu-ray is capable of a 50% higher bit rate than HD-DVD.
The Toshiba sales rep was definitely dealing with a scripted presentation, as he was not capable of answering any question that deviated too far from his presentation material. He did admit, though, that HD-DVD was incapable of outputting a 1080P signal - something that the Blu-ray camp has stated will be available with their format.
Overall, I was impressed with the picture quality. It certainly looked better than standard definition DVD's. But, I was disappointed with some of the encoding and compression artifacts that were often distracting (at least to me).
I'll still put my money on Blu-ray. At the demos I've already seen of that format over the past few years, I do not recall the noticing the type of artifacts I just saw exhibited on the Toshiba demo. Or, at the very least, I'll go with one of the multi-format combi players that LG has announced.
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