Old news, in reply to the two outdated stories posted:
The "negatives" on Blu-ray are bunk. Blu-ray is currently outselling HD-DVD by about 3 to 1.
Vivid is producing a porn title on Blu-ray- "Debbie Does Dallas Again." There are 2 basic concerns with limited porn replication: Sony institutionally is cautious in this country (porn is available on Sony media in Japan) - and Disney got burnt.
There was a well publicized incident where a porn title was on a Disney tape sold to some family. I think at the end of the Disney movie, part of a porn movie continued. It was apparent that someone at the factory recorded a Disney title over a tape that previously had a porn movie on it, but did not overwrite to the end of the tape. Since the porn movie seems to have been longer than the Disney movie, some was left on the tape.
Because of this, Disney instituted some rules on anyone replicating Disney media. This pretty much translates into the replicator deciding to do Disney or porn, but can't do both. There is at least one replicator out there that will do porn on Blu-ray. As the market expands, this will no doubt grow.
On the other hand, HD-DVD seems a more robust medium for video store rentals. From what I read Blu-Ray is burned closer to the surface of the DVD, and HD-DVD is burned "deeper" in the DVD. That might make Blu-Ray more susceptible to scratches ruining the DVD and would not be suitable as a video store rental or shipped all over with Netflix.
Coatings were developed that work just fine. The fears of scratch susceptibility were addressed. The new hard coatings make Blu-ray at least as protected as HD-DVDs. And by being closer to the surface, it allows for more layers and greater future capacity. Six and eight layer Blu-ray discs have been demonstrated, to over 200 GB. HD-DVD can never hope to match Blu-ray for capacity, because each HD-DVD layer is about 15 GB, compared to Blu-ray's 25 GB, and more Blu-ray layers can be placed on a disc.