Articles last fall indicated that the Paramount contract was very complex and contained many possible exceptions and escape clauses. I would think it very likely that Paramount can find a way out.
It is also possible that Toshiba may seek an escape especially if they have payments that were not made, which seems likely if there were in fact escape clauses. For example, it is known that part of the contract allowed Toshiba to use Shrek in promotions.
WRT Universal: I had been under the impression that their contracts were up at the first of the year. Have not heard anything about what the new status might be. If you look at the release schedule for upcoming months, Universal has very few titles announced for HD DVD. Perhaps they have left their options open.
While it is impossible to time these sorts of things in a totally happy way, one benefit of Warners announcing today is that this gives other parties (especially Universal and Paramount) an opportunity to think about their response instead of going to CES and making statements that they might choose to not have made.
I suspect that this will be a very busy weekend at NBC and Viacom as they come up with their response. It is highly likely that they will not proceed in the manner they had expected.
If one of them makes a change, I think the probability is extremely high that the other one will go instantly.
Finally, there is a huge amount of pressure on all studios from the financial community to get this resolved. DVD sales were off for the year (probably about 4%) and were down 2% for Q4, which was thought to be extremely strong from the perspective of content. You can bet that NBC and Viacom are hearing to get this resolved pronto.