Some of you are underestimating the PS3's power to dictate the outcome. I will agree with what was said above - I too, know nobody that uses game consoles to watch DVDs. (It's kind of a lame concept, because whenever the "adult" wants to watch a DVD, he has to kick the "child" off of a game (I put "adult" and "child" in quotes, since the roles I describe can actually played by persons be of any age
). And many game consoles are in "play rooms" rather than hooked up to the main TV/Theater.)
But that's beside the point. The point is that the studios lined up behind Sony precisely because of the PS3 trojan horse strategy; they couldn't care less about whether BD is actually "better" or not. They see those milions of *potential* BD movie players, and so prostrate themselves before Sony.
If HD-DVD had the same studio support, it would be all over for BD (since it's too expensive to justify the meager advantages it has (or claims it will have in the future) over HD-DVD). But PS3 has delivered studio support. And I don't think it's like UMD, which failed despite early studio support, because UMD made zero sense at all.