More of an industry "perimeter-sider" - but I tend to try to keep up to speed on a lot of this stuff.

Check out my HDMI FAQ for some details on the different HDMI versions. Realistically, we could get along just fine with HD-DVD and Blu-ray using HDMI v1.1 by letting the players decode the new formats. I've read something recently that suggests that getting enough processing horsepower in the players to allow them to decode DTS-HD Master Audio has been a problem, but DD+ and TrueHD can already be decoded in the player in many cases. There may also be issues with making use of HDMI v1.3's automatic lip sync adjustment: namely, it's going to require the entire signal chain to be HDMI v1.3 compliant (the TV as well as the source and the receiver or processor), which makes me suspect that it'll be years before most of us (and possibly a year or more before anybody at all) can get away from manually adjusting lip sync delay. Likewise, the extra video capabilities of v1.3 aren't really anything we can use until displays and sources both develop to a point where they can benefit from it. The problem is that consumers have decided that HDMI on processors (and to a lesser degree receivers) needs to be v1.3 (folks have been asking for it at AVS since before v1.3 was even published by HDMI), so manufacturers have steered clear of pursuing HDMI in processors until they could do v1.3 (except for a couple cases, like Anthem's AVM40/50 and D2 or Lexicon's MC-12HD). Current pre-pros will not be obsolete, although some effective solution for switching multichannel analog would certainly be nice (Zektor has something that'll switch 7.1 now, but it's pricey). I also hope to see companies like Denon or OPPO Digital come to market with all-purpose players that would offer one or both HD formats alongside DVD-A and SACD so the single multichannel analog input that we're all faced with can cover all the bases, but it'll probably be mid-2008 before Denon could pull something like that off and even longer for OPPO (their business model is to take stable technology and do really cool things with it, not hover on the bleeding edge).