What a lot of people aren't taking into account with these format wars...
Back when it was Beta vs VHS, there really was no similar option available for the home user... so IF you wanted a VCR then you had to pick Beta or VHS (or both if you were rich), otherwise you just did without a home VCR. That forced the market to pick one over the other.
Now... flash forward to today... Yes, HDDVD and BluRay are the only HD formats available to choose from... BUT you can still use regular old DVD which is really just hitting its high-stride with most homes having DVD in-home and lots of movies and now TV shows coming out every week on DVD.
For many shows (comedies for instance) HD doesn't make the show funnier or more enjoyable... so you don't feel like you HAVE to see a comedy in HD, like perhaps you would a Sci-Fi or Action movie or a Drama set in scenic country.
Then you factor in that HD is only viable if you have an HDTV, and it is just the last year or so that HDTV has become cheap enough to be an option for most home viewers beyond the early adopters... and even at that a good HDTV still runs you $1000+, so you aren't looking to spend another $500+ on an HD player when you can get standard DVD for $50!
So unlike the Beta/VHS days where consumers had to pick one over the other... Consumers today can pick "none of the above" and watch "old" DVD technology until the war settles... which could make this format war drag out OR allow for a third or fourth technology to enter the fray in the next couple of years.
It is entirely possible that neither HDDVD or BluRay will win in the end... and perhaps a technology not yet on the market could be the winner.
Consider too... that while VHS was beating out Beta there was also Laserdisc technology which in many ways was the predecessor to DVD... but folks were by and large happy enough with VHS such that Laserdisc fell by the wayside (even though it was probably superior to VHS or Betamax)... so there is precedent for consumers ignoring new "hot" technology in favor of the old standard while waiting for the next big thing to make a mark.
It took CDs a while to put vinyl out of business... and even longer to wipe out cassette players for on-the-road convenience... so while there is a market for HD on disc... I think the format war will only serve to delay consumer adoption while most sit on the fence waiting for a frontrunner.
Of course they could force adoption by simply stopping DVD manufacturing. Companies could just start making only HDDVD and BluRay, forcing consumers to choose... but the market backlash from that (and lost revenue from DVD sales) make that a very bad option to consider.