Blu-Ray should fair better once they use more VC-1 codec over mpeg2. This has been hd-dvd's biggest advantage as the software has been very well done with the new compression codec.

Still too early to tell which will win. That said, I recommend hd-dvd due to it's low price and better performance at the moment.
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Sony HS51 PJ
Outlaw 990 pre/pro
Outlaw 7100 amp
Denon DVD-2910
M&K LCR750
M&K Surround-55 tripole
Dual M&K VX-1250
Outlaw PCAs
Blue Jeans Component and HDMI
Panamax 5500