There are only three truly significant differences between these formats in my mind.

First: Blu-ray holds more data than HD-DVD, although no Blu-ray disk manufacturer is producing the highest-capacity Blu-ray disks, and so all current commercial HD-DVD movies are higher capacity than Blu-ray. Not that you’ll care too much how big your disk is when the picure is comparable due to HD-DVD’s better compression algorithms.

Second: The HD-DVD manufacturing process is very similar to traditional DVD manufacturing. It will therefore take significantly less money to upgrade a facility to produce HD-DVDs than to upgrade a facility to produce Blu-ray disks. Also, an upgraded HD-DVD plant can easily reconfigure to produce standard DVDs, which a Blu-ray plant couldn’t do.

Third: The HD-DVD spec requires that a player’s hardware can play back two simultaneous streams of video. The result is that special features in videos, like multiple angles and commentary, can now be picture-in-picture. For example, a computer-animated film might make available a “commentary” picture-in-picture video stream that plays the wireframe model of the video that is currently being displayed on the screen.

The main reason why you’ll hear Blu-ray proponents saying that multi-format players will be prohibitively expensive is how they imagine the world if people started buying multi-format players and they suddenly became reasonable in price for everone to buy. Follow along…

When you spread the cost of tooling-up the disk factories over the number of disks they produce and include material costs, a Blu-ray disk will cost around twice as much to manufacture as a HD-DVD. If everyone had a combo player, the movie studios would get the opportunity to select a single format, since no matter what they selected, everyone could play it. Given the opportunity to save money by producing disks in only one format, the studios would jump at it. Which format will they choose? Well, you can bet that they’re not going to choose the more expensive of the two formats. An extra $.50 per disk would certainly hurt their bottom line.

The PS3 is looking less and less “all that”, and Sony even moreso. I’m becoming more convinced that open standards are important, almost required, for business success.