To me this is SACD and DVD Audio all over again. The discs won't play in most places people want them, so there will be resistance.
It would have been a tough sell with one format, but doable. With early adopters like me sitting this out until a clear winner emerges, it could derail the whole transition.
A similar thing almost happened with Divx in the late 90's, but that product was so woefully deficient (discs basically self destruct after a few days) compared to the own it for years DVD product.
There is no clear cut winner here. Yes, Sony has more space on teh disc and it is more durable. But the other tech companies don't want Sony getting rich off of it, and Sony controls too much program content to be blown away by HD DVD either.
Best case scenario is for one to bomb badly, letting the other take over. Like VHS/Beta though, that could take 5 years. By then we may be getting all of our content off of secure 50MB interent speed networks (Fios, Cable Modems, etc.) via IP.
Like SACD, Sony might get blown away by the next iTunes. We'll see. I won't be buying either in the meantime. I'm an XBox 360 fanboy, but I don't plan on getting the HD DVD drive either, unless the price is real low or it offers another compelling reason to upgrade (ie. upconverting all my DVDs to 1080i, etc.)