In my opinion this format war isn't betamax vs VHS, it's betamax vs betamax.
The world isn't ready for the transition yet, we still love our DVDs. 90% of homes don't even have HDTVs, so there is no point in them investing in either formats.
HD-DVD is cheaper, simpler technology but doesn't have the storage capacity of Blu-ray. It is dominating blu-ray in the market right now, although both formats are no where near selling what was hoped, however this is set to change when the PS3 comes out.
So, all-in-all, I think both formats aren't necassary right now.