As usual, Gonk has characterized this situation brilliantly.

You can take his scenario, apply it to CD vs. SACD/DVD-A, and get the real world situation. Consumers seem not to be adopting the new hi-res audio formats because they "only" offer better sound. Unfortunately, that better sound is really only apparent if you're a more-than-casual listener and you have a better-than-low-end system to reproduce it.

Similarly, HD-DVD will offer better picture but only for those with the attention span and the monitor to recognize it.

Actually, it occurs to me that we might see a repeat of LaserDisc. That is, a superior format that just ticks along as a connoisseur medium. We shall see....