I remember looking at a comparison of Casino Royale upscaled vs. the Blu-Ray version and the difference was pretty noticeable. I seriously spent 30 mins looking for it to show you because it completely convinced me that upscaling is nice, but definitely not the real deal.
Don't buy an HD-DVD player. That is just a bad idea. If you want a high-def player, get a Blu-Ray one that has upscaling (I think the new Sony one does, the new Panasonic, and the PS3). It is still a useful feature and you can use 1080p if you ever get that kind of a TV. The 5 free movie promotion should still be going on if that is what is drawing you to the HD-DVD player. HD-DVD is dying, it is just a matter of when it will kick the bucket.
You do realize that only one major film studio supports HD-DVD exclusively, Universal. That means you can't watch Sony, MGM, Fox, or Disney movies. I would recommend looking into what films each has before you make a decision.
And can you honestly say that there is not one game between here and Christmas that you want on the PS3 out of Warhawk, Heavenly Sword, Lair, Folklore, Hot Shots Golf, SingStar, Uncharted, Ratchet and Clank, SOCOM, and including the stuff supposed to be here before March Killzone and Little Big Planet, not to mention all of the multi-plats with the 360? If you own a 360 I could understand, but if not, I seriously think you should look at the PS3's release lineup on IGN.
http://ps3.ign.com/index/release.html
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson