Just a bit about the capacity. HD-DVD has the "capability" of 51GB using triple layers, "beating" Blu-Ray by 1GB... But that doesn't matter.
I've read articles that show that either format, even HD-DVD's "tiny" 35GB mainstream capacity is MORE than enough to store any current movie in HD format. Those longer movies, like LOTR, etc, may choose to have the movies on one disc and extras on another. Even still, you should still get 100% HD quality on either format, so the "capacity" is somewhat unimportant right now.
I too am compelled in getting an XBox 360 to get into the HD format (I won't get into my reasons for HD-DVD or Blu-Ray since that is very subjective) because of the ability to play games, stream from a HTPC, etc, but like others say, a true stand alone *should* provide better speed, output options, and so on. Heck, I even saw a Blu-Ray player at Best Buy last week (or maybe it was Wal-Mart) for $400. Still twice the price of the comparable HD-DVD player, but a LOT more affordable than just a year ago.
Those dual-players are still running about $1000 right now. You could buy two nice stand alone players, or even your choice of an XBox 360 or PS3 AND the "other" as a standalone player for the same or less than the dual player.
I am excited about Transformers in HD, which leads me towards HD-DVD (besides my personal opinions about that format), I would like to see Batman Begins on HD, and it sounds like LOTR will come out in both formats. Now if George Lucas would put Star Wars in HD-DVD I would feel comfortable picking that format exclusively. Until then, I am still a little bit "chicken" to try one vs. the other.
