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There are so many bitter tears flowing in this thread, it's really funny.
People are so transparents too in this thread, it's hilarious.
HD-DVD death blow has been given, now we're waiting for it to fall dead.
HD-DVD was backed by MS, so all the MS fanboys and Sony haters (I never liked Sony for their poor quality products, but I see I was an angel compared to the haters) now hail the next MS backed thing : VOD downloads.
I see no other rationale behind people suddenly discovering that downloads will now break Blu-Ray (wishful thinking).

People here talk about downloads crushing Blu-Ray. This doesn't make any sense at all.
Before downloads crush Blu-Ray, which is the best quality you'll get, and whose purpose is better quality, they will first have to crush DVD. Good luck with that !
Seriously, people illegally download movies compressed to the size of a CD. Something that some keep on a CD afterwards, for convenience.
There's no way these people will download gigas to have a high quality h264 movie. Besides, this requires all kind of complicated things that people won't cope with : broadband, RAID, computer, ...
They could make an appliance : that's another expensive thing they'll have to buy : won't happen.
MS already tried to do downloads on its XB360, and for now, the cable operator just won't follow.
They'd better not, as for now, my rule of thumb, on which I base all my predictions regarding MS since 2001, that any MS partner is doomed to fail (fail gaining acceptance, go bankrupt, screwed by MS, ...) is still very true. To a point it's almost scary (IBM, Sega, Orange, Toshiba, ...), and this no visionary thing, but deduced only by looking at History.

After 15 years passed observing the HT world, if downloads were to take off, I would be the first one surprised, I would not even believe it without lots of proof. That would mean suddenly a huge amount of people have wisen up. That just won't happen.

Someone was talking about LD (laser disc), but incorrectly said that only early adopters jumped in.
Actually, that's not true at all, as LD was also pretty popular in Japan. Download taking off would be the equivalent of LD having gained mainstream appeal.
Besides, to me, Blu-Ray has the same appeal as LD had : higher quality.
I just don't see people vying for quality, so DVD is here to stay.
Higher quality (LD) didn't crush VHS, only convenience (DVD) did.
So I doubt Blu-Ray will do anything, unless they phase out DVD, which won't happen before Blu-Ray players are the price of DVD players. So I also say not before 2012, and perhaps way after that.