There is no easy answer to this question, at least right now. Here is one man's opinion.
The movie studios, represented by the MPAA, are very, very concerned about the possibility of perfect digital copies of their property (movies) creating a black market that would prevent them from earning the expected revenues from their labors. This fear was exacerbated by the recent meteoric rise of MP3 & Napster. You know, free music for everyone. Yikes! said the MPAA.
The consumer electronics companies who make the equipment were put under significant pressure by these factions. The most obvious solution was to develop a security system that could control the use of the program material. This way the studios could decide when & how movies could be copied, or not.
Two different methods have developed, for the sake of brevity, we'll call them DVI and IEEE1394.
DVI is a more limited method, with no communications capability and it was chosen by a few companies that seemed to indicate they would only use DVI and eliminate the analog outputs that are currently used by every HDTV capable display. In other words, your HDTV & HDTV source could only be connected by DVI.
IEEE1394 is more flexible with two way communications, in addition to a wide pipe for HDTV. The companies that have sided with IEEE1394 have already developed a system (known as iLink or HAVi) for letting anything with a IEEE1394 port talk to each other. The benefit of this is still unknown (at least to me), but it has potential way beyond DVI. It also has a recently approved (by Sony Pictures & Warner Brothers) copy protection system called 5C. This would let users have limited ability to copy for personal use, if the owner allows it. The companies aligned with IEEE1394 seem to be less intent on only having their standard on equipment, which would mean we would still see analog video outputs on HDTV sources, at least for awhile. This last possibility is not a sure thing. Until HDTV's, VCR's and new STB's start showing up with IEEE1394, we won't know if existing equipment will be obsolete or useful until some point in the future when all video and audio connections are digital.
Because there are a number of significant issues yet to be decided, like how the cable companies will deal with HDTV, we won't know how all this will play out anytime soon. Some people think this will take a few years, or more. Others think because of the recent movement by the studios and CEA (
http://www.ce.org/newsroom/newsloader.asp?newsfile=7460 ) that IEEE1394 full implementation will come relatively soon.
Confused? I'm sorry but you'll just have to join the rest of us.
This has been discussed at length at AVS, do searches for DVI, IEEE1394, 5C in HDTV Hardware and HDTV Recording for a lot more detail.
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