Blockbuster, as it exists today, is absolutely an endangered species. Every time I go into one (which is not that often these days) it's never busy like it used to be and the stock seems to be going far more games oriented than movies!
Blockbuster should be moving to provide Video On Demand services that they can license out to various providers, but even that is iffy.
As far as HD DVD's, I have many concerns on that front. First of all, there's the two format problems. The movie studios just announced last week that they're postponing releasing movies for either format as they had assumed that the two sides would work out their differences. That means that even though players will be available for Christmas, there will be nothing to watch on them.
The other problem I have is that I suspect that the movie industry will screw this all up and start charging premiums for DVD'd that are in HD format, as if the costs to produce them are that much higher. Just a hunch of mine and I hope I'm wrong.