Me too. This isn't a death blow and the HD DVD camp definitely could respond, but will they and how is a very good question. They need to keep Universal on their team and away from neutral. Maybe this news will make Ken Graffeo dig in his heals even more. I don't know how stubborn he is. Other places he has said things along the lines of wait until Q4. Maybe he'll dig deeper into the vault and bring us some better stuff than planned.
And how does this affect Wal-Mart's decisions this year and next? I don't know, but wish I could listen in on some of their meetings.
For those who care first about HD on disc succeeding and less about their favorite format winning, I think we can take some positive news from this. Blockbuster did an experiment in 250 stores and the result could have been that interest was low enough that they wouldn't roll out to more stores. But we can see that something is getting them to expand to have close to 7x as many stores renting HD discs.