Its not fair to compare discounted BluRays to standard price DVD's.

In my local UK supermarket

Dark Knight DVD - 6.99

Dark Knight Blu Ray - 17.99

Thats a 250 percent price difference.

Fact is at the moment you pay a premium for Blu Ray.  It wont always be the case but it is right now

Exactly. My 5.00 DVD-30.00 Bluray was one of the more extreme examples I came across, that was Pirates of the Caribbean 3 at one of my local electronics stores (in Holland). But still, stuff on Bluray is just way more expensive, no matter how you spin it, and most of the time, people go for cheap.

 It's not free, but it's a type of what is to come into being, dispersed more widespread.

People dig free stuff.

I agree,  but OnLive is so far from transpiring on a widespread basis that it's not even funny.

time will tell.

I signed up for the beta.

Technically, not enitreyl correct... 17.99-6.99/6.99=11.00/6.99= 157% is the price difference :)

But nitpicking apart, I was not comparing discounted BR to full price DVD. Both at full price and discounted you still pay a premium for BR, but it's still at the same price range where DVD was, say, 3 years ago. And people bought DVD like crazy 3 years ago. The premium over DVDs is again of the same order as the difference between normal and extended edition, and that was a price premium that people seemed rady to fork.

Once they are cheap enough the percentage difference won't count at all: just to exasperate it, if DVD were 1$ and BR were 2.5$  do you think people would care about the 157% more?

Right now they can be percieved as "slightly expensive", but basically in the same price range of DVD. Give them a year and they'll cheapen enough to break down a few further psychological barriers.