I worked a video rental joint in the '80s, and it was the "sell-through" pricing of VHS (IIRC it started with Top Gun at $20) that really spurred the growth of VHS prerecorded tapes, without which the idea of "home theater" would have been an exotic concept reserved for those of us who bought LD. As you say, gonk, the agressive pricing of DVD (I remember buying new titles on Amazon for $10 in the late 90s), combined with all the added benefits over VHS, made the upgrade worthwhile to the Wal-Mart customer.

Without the same "order of magnitude" reason to upgrade, both HD formats are destined to be marginalized (which isn't good considering the investment). One or both of them may have some tricks up their sleeves, but with on demand content coming of age (and hardware provided by broadband companies), they're going to have to raise the bar higher to win folks over.

I'm on the fence, as well, but right now it's a nice to have, not a must have...