I'm going to let the other attendees handle most of this one as there are a lot of threads involving both formats. Let me add a couple of my own thoughts based on what I saw at CEDIA.
For the record, both HD-DVD and Blu-ray look great and once everything is 1080p (both from the players and into the displays) a lot of this will die down. Right now there are a lot of differences between what the formats currently offer and, a bit surprisingly, in what is planned for the near future. In the first place, it has generally been acknowledged that one of the real advances of the HD formats (besides better pictures, of course) is a whole new generation of interactive menus and the like. This includes the ability to modify the disc content with updates, corrections, additional features, etc. much like those of us with XBox 360s see when XBox Live tells us that there is an update or an enhancement to a game and, once the new or revised content is downloaded into the player's memory (or the XBox's HD) then each time you play the game or the disc the new content becomes seamlessly integrated with the original material. We talked extensively with a Toshiba representative about this as we watched the incredible Tokyo Drift disc (street date 09/26/06). You may not like the movie, but the "extras" are amazing. The most important thing to remember is that you need a connection to the Internet (either wired or wireless as is done with both the Toshibas and the XBox 360) to take advantage of this update feature. But the potential is staggering. If a title is released with some content that has an error - everything from spelling mistakes to misinformation and even some visual aspects of the disc - there is a good possibility (depending on the nature of the problem) that the issue can be resolved with a download rather than a disc recall. This really makes it easier for the industry and for the consumer.
While the Toshiba HD-DVD players already incorporate "internet ready ethernet" I was a bit surprised that the $1500 Pioneer Blu-ray player did not. Yes, it has an ethernet connector but we were specifically told that it was not internet-ready but just useful for some other purposes. Mention was even made of a version of Blu-ray termed "Blu-ray link" (or something like that) whereby future players would have the two-way capability needed to allow content update. And the thing that jumped out at me was the statement that the first Pioneer Blu-ray player would not be upgradable to this interactivity. That is some food for thought. The time frame for Blu-ray "1.1" (my term) was a bit vague but sometime next year.
However, the Blu-ray pictures looked excellent (in fact I thought that they looked better than HD-DVD by a small margin) and that was probably due to the fact that the source was 1080p into 1080p sets. More importantly the source was film material transferred at 1080p/24fps into a display that accepted 1080p/24fps at the Pioneer demo. The "frames per second" specification is important when viewing film sources because it matches the frame rate of film and avoids telecine "pull down." To be completely accurate, the Pioneer presentation was dealing with 1080p/72fps, not 24fps. Once you have a 24fps rate it is an easy matter to deal with an exact multiple (24, 48, 72, etc.) by just doubling or tripling the frames with no loss or gain of material. Doubling or tripling the frame rate reduces "judder". For more on "judder" look
HERE.
The problems arise when the source (or the display) has to deal with 60 fps - the video standard and can't natively hadle film frame rates. And the choice of 72fps is based on some work whereby plasmas seem to look best at 72fps. Front projectors, if you're curious, look best at 48fps - according to people like Joe Kane and other experts in the field. In any event, the majority of the Blu-ray players (but not all!) offer 1080p/24 so they can really shine with film sources. Someone mentioned elsewhere that the Panasonic Blu-ray does not provide 1080p/24 but 1080p/60. And, as will be (or has been) stated elsewhere, it's important to have a display that handles 1080p/24 input to maximize the picture performance. Right now HD-DVD doesn't offer 1080p/24 but there's no reason why it can't in the future, just as Blu-ray can offer ethernet Internet connectivity.
So, in my opinion, it's currently a draw. HD-DVD offers better interactive control of content and updating it, while Blu-ray offers, at the moment, a possibly better picture with film source materials thanks to 24fps support. There are so many other variables at play here (displays, the quality of the source materials, etc. etc.) that it's hard to say definitively that one technology is better than the other. They both produce a better picture than most of us have seen in the past (with the exception of some 1080p HTPC source materials which are not considered to be mainstream) and the consumer is gradually getting higher quality visual content than in the past.
O.K. Your turn.
) but that conversion has not affected picture quality on HD-DVDs yet. At least the early comparisons haven't highlighted this as a concern or even an issue. 
