Blu-ray vs HD DVD ... it was like Betamax vs VHS all over again.
This time it seems the Playstation 3 was the killer app, having used Blu-ray Disk as its standard, and HD DVD losing out in sales.

The Blu-ray player is doing what expensive TVs have been doing, interpolating to a higher resolution and producing higher quality images than the older DVD players.

The multiple Blu-ray standards are going to be fun. BD 2.0 (replacing 1.0) should be interesting, with self-modifying content, 1G of local storage in the player, embedded Java language and LAN interfaces mandatory to download new content or updates to the security programs in the 2.0 players.
2.0 disks aren't going to work properly in 1.0 players.

I've seen stories of various versions of the Blu-ray disks including a proposed 1TB version, so I think future formats are pretty well covered for now. I'm waiting for Blu-ray recordable to go with terrestrial HD TV when the UK goes 100% digital, then I'll jump ship and abandon the DVD recorder.
For now I'm using Dual-Layer DVD for recording.