IMO, this was an intensely stupid move by the HD-DVD camp. Why cancel a chance to fight back when you're on the ropes. It doesn't make much sense to give up like this. I have both formats (both the 360 HD-DVD drive and the PS3), so I'm not really too affected by this. But, competition ALWAYS benefits the consumer. If Blu-Ray is the ONLY format, will the prices come down, stay where they are, or even increase? Consumers, on the whole, seem to want to spend the least amount possible when it comes to movies. So, DVD sales are still very very strong.
I have a friend who has always been a complete videophile and audiophile since we were kids. He always had the nicest stereos and other electronics. And he surprised me the other day when he said that, at this point, he has no desire to upgrade to Blu-Ray or HD-DVD. He is more than happy playing upconverted DVD's on his 1080i DVD player over his Sony Bravia. I was surprised I stepped past him in the technology dept. First time in my life I had stuff better than him. LOL!
I currently have 4 devices that upconvert my regular DVD's (PS3, X360, Xbox XBMC, dedicated 1080i DVD Player) and some upconverted DVD's beat out their Blu-Ray and HD-DVD counterparts---Terminator 2 and The Punisher being the prime examples. That being said, I don't have many HD-DVD's or Blu-Rays (4 HD-DVD's and 10 Blu-Ray's). The only time I buy the more expensive format is when it is a series that benefits from the Hi-Def treatment (like the Harry Potter series). Otherwise, upconverted DVD's are fine by me.
It's sad that the HD-DVD camp are turning limp like this. I honestly wish both formats would stay and continually lower their prices due to respective competition.