Must confess I'm much in agreement with 355f here.
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I'll be "brief":
HDMI, BluRay and HD-DVD are Digital Rights Management COPY PROTECTION SCHEMES, disguised as offering improved image and sound quality to consumers.
In order to get consumers to go along with this scheme, the carrots of improved image and sound are held out before prospective buyers. But a lot of people are buying into this copy protection hardware and software while unaware that they can actually be locked out of accessing the same if illegit use is detected. (With lots of people reporting such lock-outs while making perfectly legitimate use of same.) Vista, HDMI 1.3 and both high resolution playback formats have intricate, two-way and internet connected copy protection built in, with certificates signing off on everything you want to do with the equipment. This is the movie and music industry's attempt to "do something about illegal downloads and copying."
Yes, the Full-HD image of a properly sourced and scanned production is superior to upscaled DVD, no doubt about that. And multi-channel, full resolution sound is a blast. Nice carrots - I'm equipping my Home Theatre to be able to enjoy that fully.
BUT - the difference between Full-HD and excellently upscaled DVD is not sufficient to get me to abandon my many hundreds of DVDs. (I did that once, with VHS, but I won't do it again. Particularly not for older, classic source material that was not produced either visually or aurally to exploit what the new formats can do.
On a well calibrated screen, with the playback unit properly configured, you'll get amazed by what you can get out of your DVDs. As 355f states above, several of the major players are abandoning the high-rez formats due to lackluster sales (to say the least) - people aren't letting themselves be tricked into making the major upgrade involved, and overall sales are seriously lagging relative to the projections underlying the initial investments in the technologies.
As to whether Full-HD is better than HD-Ready - well, the resolution's technically better, and at close range you can also perceive it. But I have to confess at finding a lot of the Full-HD material I have seen "plasticky" compared to both cinema and HD-Ready resolutions. (All modern movie screens are perforated, in order to let the sound from the center speakers and L/R speakers through - and I think we like what that perforation does to the image. The Full-HD image gets clinical in comparison.)
Whatever. The BluRay camp is getting desperate according to what I'm being told, and the staggering price-cuts on HD-DVD is building an unexpected relative groundswell for that format. All projections BEFORE the "war" had BluRay beating its rival in short order - that didn't pan out.
As to people stating a huge difference between Full-HD and HD-Ready, at normal viewing distances ... I'd want to ask whether the playback chains were similar.