The mass-market uses small (32″ – 42″) HD TVs – that is the minority that have them, Nielson put total HD TV market penetration at 24% a month or so back.

We also know that 720p/1080i HD TVs are the majority still being sold (according numbers as recent as Sept 08).

So the jump in image quality Blu-ray offers is much reduced on those sets compared to the quality upscaled DVD offers.
Of course there is a difference but I am extremely doubtful if the mass-market will find that marginal improvment ‘worth’ the much higher costs Blu-ray demands.

Most will find their DVD ‘good enough’.

…..and for those who say that the audio quality is so much better?
Well it is.
But.
I am again doubtful that any but a tiny minority will ever spend the small fortune necessary to buy the necessary high-end receiver and speaker set-up required to even hear the range of frequencies, properly defined, that HD audio offers.
I’d bet the house that most pretending to hear the difference now on low-end or mid-range kit are simply fooling themselves (usually because a little light comes on and the sound ‘gets a little louder’)

For most Dolby Digital & DTS will be ‘good enough’.

The coming recession (which has yet to fully bite) just ensures no-one is going to be splashing out large amounts on a new video format.

Even HD TVs (which I had thought might stave off the down-turn best) are having their production numbers slashed.

….and without HD TVs no-one cares about either upscaled DVD or Blu-ray.