Folks,
In my humble opinion, there is a lot of ridiculous FUD in regards to Blu-ray's future now that Toshiba plans to phase out HD-DVD.
I do see the following:
1) Now that manufacturers don't have to choose between formats and the Profile 1.1 and 2.0 specifications are finalized, the cost of Blu-ray players will start to rapidly drop, especially with new chipsets for console players.
2) I expect the majority Blu-ray discs to use either VC-1 or AVC encoding, especially now that computer workstation power is good enough to do either VC-1 or AVC video encoding fairly quickly; that's the nice thing about the general availability of quad-core CPU's from AMD and Intel at reasonable prices. Also, with VC-1 or AVC encoding, it frees up storage space on the disc so you can put in multilanguage/commentary soundtracks and supplemental features on the same disc. You may see some movies still encoded in MPEG-2, but they will be more carefully mastered to avoid MPEG-2 "aritifacts" in fast-moving motion.
3) I expect many Blu-ray releases--especially big, "epic" movies--to use either Dolby TrueHD or DTA Master Audio lossless audio encoding. Can you imagine the
Lord of the Rings movie trilogy with a 7.1 DTS Master Audio soundtrack?

Conventional Dolby Digital and DTS audio soundtracks will still be used on many modern movies, older movies, and TV shows.