It's certainly possible that HD-DVD software prices will fall, but it's also possible that new releases will simply be produced in smaller batches. You might watch for folks selling off HD-DVD collections, as that's more likely to be a good way to get some deals.
The PS3 is only about 15 months old and will be around for quite a while longer. There is no official mention of a PS4, and considering both the average life cycle of a game console and the investment that Sony made in the Cell processor and the PS3 platform I'd expect it to be around for a few more years. As for it being junk, the hardware has actually been pretty stable and reliable, aside from the inevitable fan noise that can be an issue for both Sony and Microsoft game consoles. The Wii has also been a good platform, aside from some property damage and personal injuries produced by swung and thrown controllers. By comparison, the Xbox360 has had a dreadful time with the "red ring of death" and heat-induced hardware failures, which appears to have been resolved only recently with some hardware changes.