To soften the blow, the 2 disc theatrical version includes a cupon for $5 off the 4 disc extended version, or $10 off the 5 disc extended version boxed set. It's also nice that the special features aren't duplicated.
To further soften the blow:
IF you get the 5-disc version (the one with the bookends), then you probably realize that the 5th disc is a copy of "National Geographics' Beyond The Movie: The Lord of the Rings".
What softens the blow about THAT is the fact that, if you have that particular DVD separately like I do, the version in the 5-disc set is an extended version of the show.
So in our house we are getting both the 2- and 5-disc versions.