The same thing happened to me in September of 2008 from Universal. From that time, they were already replacing defective HD DVD discs with DVD ones, so this isn't any surprise. I bought mine in July, 2008 for $20 from Inetvideo, and they luckily offered to send me a replacement HD DVD disc. I had problems with all of my 3rd generation players with one of the discs, so I think it was more of an authoring problem, as opposed to a problem from the scratches on the disc or anything like that (I tried the hot water trick like crazy, but still had problems with, I believe, disc 3). As a note, I played the discs fine on my LG BH200 when I picked it up a month later. Not sure how they would have worked on a 2nd generation unit.
I understand being ticked, but it's been at least 1 1/2 years, closer to 2, that the BSG S1 was sold at a premium, especially anywhere near the price that the new S1 Blu-ray release will be at. It sucked that these had the problems that they did, but thinking that anything HD DVD will be fixed by a manufacturer or studio these days is just wrong.