My understanding is the Blu-Ray players will also play "old school" DVDs, just like HD-DVD. It requires the use of a red laser (for DVD) and a blue laser (for HD-DVD AND Blu-Ray) so not a big deal there.
One of the biggest differences, that we already are seeing, is cost. The cost to convert a DVD disc manufacturer to HD-DVD is way less than going to Blu-Ray. Blu-Ray requires all new manufacturing equipment, where HD-DVD can be just "upgraded" from regular DVD manufacturing equipment.
Same for player manufacturing. It takes a lot less to convert DVD player manufacturing to HD-DVD than it is to scrap it and put in all new equipment to make Blu-Ray players. (just talking the actual Blu-Ray and HD-DVD pieces, not things like power supplies, cases, etc that are all pretty standard)...
That is why HD-DVD is lower cost, but in contrast, that is also why Blu-Ray has higher capacity.
