i think both will fail in terms of movie usage, but one of the 2 could possibly take over for pc storage/backup eventually
the first strike against both is that many houses either just bought dvd players within the last 2 years or dont even have dvd yet and would therefore not see a need to 'upgrade' again already
next, blue-ray will be digital connection only, this outs all people without newer tvs supporting dvi or hdmi
many of the old classics just recently were "remastered" for dvd and added extras that their vhs counterparts didn't have, are companies really going to want to try and upgrade even further?
you aren't going to see movies from the 50's in 1080p and 7.1 surround sound
the one thing that could help either of the formats is that the ps3 will come with blueray, if the support is good from the start, it may have a similar effect as the ps2 did with dvd player support, many of the first ps2's were bought as a cheap dvd player that just happened to beable to play games, something similar could happen with the ps3 as blueray players will be >$500 for awhile and the ps3 at launch will probably be in the 350-500 range due to the blue ray, or $300 at lowest. this would make a significant reason to buy a ps3 when you compare the costs to a stand alone player
hd-dvd stands a decent chance in the computer market, but probably not the movie market.
for people that want to be on top of all hightech gadgetry, hd-dvd doesn't provide enough of an upgrade over standard dvds
*edit*
forgot to mention, probably for awhile, the most you'll see of blue-ray will be similar to the sales of the psp video, possibly less as it wont be a 'portable' video type for several years when the technology is good enough to make smaller devices