Here's what I'm reading about this story:
"A tipster at an unnamed retailer..." Vague upon vague. This sounds like an 18 yr old kid, who's been rubbing one out over his PS3, jumping on the 'HD DVD suxorz" bandwagon. "...they've had more HD DVD player orders canceled over the last few days than they've seen over the entire life cycle. The kicker? All of them were canceled because of the Blockbuster announcement." Given the fact that neither of the formats are exactly flying out the door, 2 cancelations could be more than they've seen.
I've tried to dig up a verifible story, making the same claims as this one, and have yet to do so. I've seen a lot of speculation on what this means, I've found a lot of references back to this unnamed tipster at an unnamed store, but I've yet to see any kind of real data to support the story, as posted.
Blockbuster has only decided to go Blu-ray in their stores atm. If you go to their online site, you'll find quite a selection of HD DVD available. The stores have been floundering since Netflix opened up, and (at least at the stores in my area) their parking lot is usually, fairly empty.
I own both formats, and IMO HD DVD looks better, in a side by side comparison. The features are implemented better, the blacks (which are a telling point of quality in HD) are deeper, and the colors are slightly more vibrant...without looking over-saturated. (I did the comparison, sheerly out of curiosity, with the same movie in both formats, on the same tv, using the same cables and an A/B switch, to keep the settings the same).
To blu-ray's credit, they do have more studio support (meaning a larger library), and are doing a better job at getting their name out there ("Coming Tues. on DVD and Blu-ray"). Unfortunately, the biggest downfall to their players is that a large portion of them will lose functionality when they upgrade their Java menus, in October. These players lack the capacity to do a firmware update, and everything accessible thru the menu won't be when the new releases start using the upgraded Java.
I hope HD DVD wins, honestly, because they don't have quite as many restrictions on back-ups (Fox, especially, pushed for stricter copy protections), their format is finalized (no obsolete Java), and the most important detail of all...THEY'RE LESS EXPENSIVE. You will see a set-top model for HD at around the $200 price point by christmas, and that alone will put a serious knot in Sony's shorts.