This is just like the PSP, in how there were barely any AAA titles for the first year, but when there started to be a lot, people stopped buying movies.
The only differences are that the PS3 can put the movies on a TV, which is one major reason that UMDs are selling like crap, and it's high definition, it is cheaper than a normal BD player, and they don't need to purchase another Blu-Ray Disc player.
The spike in sales for BD will bring a lot of studios over to Blu-Ray, and will win Blu-Ray the war, and people will stop buying movies for the PS3 a couple months to a year after the war will be won, but the new people buying BD players, not the PS3, will increase sharply, making up for this difference.
Dual format players will be popular among early adopters that adopted HD-DVD, and about no one else, because they are the only ones that will actually watch HD-DVDs anymore.
The real question is, after winning this tiny battle between HDDVD and Blu-ray, will people actually care enough to adopt Hi-Definition and adopt whatever format that won fast enough? Optical spinning disc formats could be easilly trumped by a newer technology in 3-5 years.