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"
It may take a while, but I think we would have to wait for a very large installed base of HD displays before HD players really take over people's living rooms"

Eh, we HAVE a large installed base of HD displays. Effectively no SD-TVs are sold anymore (here in Germany there are really no SD-TVs for sale anymore outside of grocery discounters) and I may be wrong but I think end of 2008 over a third of all households in America will have an HD-TV. (numbers vary but it at least qualifies as "large installed base").

So the problem is not that there are not enough HD capable TVs out there.