I think Mark has hit the nail on the head. Joe Blow is undiscriminating about high quality in either audio or video. Following this logic it is hard to see why the general public would be very interested in just one high definition format. Put two different HD formats in front of them and there is a sure recipe for failure.
But arguing against this, press reports suggest HD TV has taken off so maybe there is a bigger potential market out there than I think.
I'm one of these nutters who strive for the best in audio & video and have both DVD-A capabilities through the 861/800 combo and SACD through a highly (and expensively) modded Marantz SA-17 BUT I'm not buying many hi-rez discs. Why? Mainly because they are difficult to find and the library is so restricted. e.g. Amazon have been weeks trying to locate a Faure SACD listed on their site and are sending me part of the order while they continue to try to locate the disc for me.
So will I buy into either high definition video format? Probably not - sorry Health Nut (and I am not convinced that blu-ray is "superior" to HDDVD anyway). I'm really not into purchasing movies and the video I'm interested in (ballet, opera etc) is pretty mediocre quality now, little better than VHS standard and certainly not up to the best that present DVD is capable of. Most of it is anything but sharp projected on to the 96 inch Stewart screen via a Barco 808s projector and most is of inferior quality compared to terrestial digital FTA broadcasts.
I guess the rival camps look at how VHS succeeded over Beta in that earlier video war so are banking on their side winning in similar fashion. They prefer to remember this rather than the earlier debacles in audio.
The whole scene is sad and looks like being a huge waste of resources :-(
John