I'm pretty sure this is Betamax all over again. Except this time, Sony's product is the one with the lower quality picture, along with lower capacity, now that it has recently been announced that they will be able to add another layer of storage on the HD-DVD discs, thus giving them the one up on storage. Plus, on top of all that, you still pay more.
I just see this as another move like Mini-Disc, and/or Betamax that will fail due to Sony's ego.