I look at this more like the first step in the right direction. It seems like we are stuck with two standards. That means that Universal players are the future.
This LG product seems like it will be inferior to having stand alone players for each format, since it doesn't support all of the HD-DVD features and costs $1200. Since you can get the HD-A2 for $400 and the new gen 2 Samsung Bluray player will probably hit the market selling for below its $799 MSRP, LG's only real advantage is the single box. Hopefully when the LG hits the market it too will quickly drop in price, maybe dulling the price difference somewhat.
My hope is that this move by LG forces its competitors to make Universal players as well. I'd just like my first purchase of 2008 to play HD-DVD, Bluray, DVD, SACD, DVD-A, and CD, and say Denon on the front and weigh 25 pounds. Anybody else want one of those?