Question from a neutral guy!

[Elandyll]

Going more in details, Blu Ray has been conceived like the DVD format was (which is ironical, considering that Toshiba and Warner were the fathers of the DVD format), in the sense that it was made to be a whole new step for AV formats.

Blu Ray gathers far more companies and standard makers than HD DVD, with more than 170 companies involved in the Blu Ray Association (BDA).
When Philips, Sony and Matshushita<Panasonic-JVC> (between all of them, the inventors of the Audio CD format, VHS, and Betacam among other things) gather, you know you have the strongest AV companies in the world -period- behind the format.

Now the Blu Ray format has been designed (Laser technology created by Sony and IBM btw, "borrowed" by Toshiba for their offshoot format) to be evolutive, and absolutely intended to be a whole new step in the data formtas (beyond simply an upgrade of DVD to make a quick buck before dowloads show up).
Blu Ray stores 25Gb per layer vs 15Gb for HD DVD. While Toshiba strive to one of these days present a triple layer at 51Gb (that could be incompatible with existing players due to physical constraints for the players), Blu Ray has a 50Gb fornat since a year or more, and the 100Gb and 200Gb are being worked on (wouldn't surprise me to see the 100Gb at CES 2008, it was shown at CEDIA 2007).
The bitrate is a huge issue, often dismissed by HD DVD supporters.
Encoding a video / audio file is one thing, but you will stil need a pipe large enough to transit the file. That's the Bitrate/ Bandwidth.
Blu Ray has a joint (a/v) Bw superior to 40mb/s peak, while HD DVD, if I am not mistaken, peaks around 30mb/s. For image quality, and to have lossless/uncompressed audio, that is huge.

HD DVD launched first, with sub-par specs, but what they called "finished" spec, aka with PiP feature and the online capabilities. These were future plans to be developped for Blu Ray, and are coming to fruition now with the profiles 1.1 (several players out, and PS3 enabled since December) and 2.0 (online capacity) early this year.

For all that matters for movies (capacity, and pic/audio quality), Blu Ray has been superior since launch (if we except some small blunders for a few releases in Mpeg2). The very advanced AVC codec is now standard, even if the VC1 codec can also, on high bitrates, deliver good results.

Blu Ray provides what is needed on the basics (where HD DVD failed), and evolves (with backward compatibility - aka a 1.0 player will read a 2.0 authored disc, just won't show the bonuses).
Of course, Blu Ray can also show (upconverted) your good ol' DVDs on HD.

Last, Toshiba and Warner proved with the DVD format that what counts for "implantation" is content and studio support. The BDA learned this lesson well, and we are two studios away (Paramount and Universal) from 0 content on HD DVD.

Current situation:

HD DVD:
Paramount/Dreamworks (TF / Bourne series / Shrek -- Spielberg is not part of the deal, and M. Bay is staunchly pro Blu Ray)
Universal (Again, except Spielberg Movies)

Blu Ray:
Sony/Columbia: Spiderman
Warner: Batman, HP series
NewLine: LotR ?
MGM: Bond movies
Disney / Pixar: PotC, Narnia, Wal-E, Nemo...
Fox: Alien, Star Wars? (2010: Avatar, Next James Cameron)
Lionsgate Films: Saw...

Just to give you an idea