HD DVD is selling better because it was the format that was most ready for public consumption.
It's had excellent quality and interactivity for most of the formats life. The players were really the weakest link and they aren't bad. I have a feeling that the next models due Dec 11 will make improvements as well.
Basically HD DVD is proving that this was indeed the format that should have been chosen to succeed DVD. Imagine if Sony, Matsushita, Philips, Samsung and others didn't get greedy on us and break ranks. Imagine the hardware and software we could have at our disposal.
HD DVD is also selling much better than Blu-Ray because it is more accessible to the average consumer. When Blu-Ray is at best only equaling the quality of HD DVD at double the cost, there is little to no incentive for J6P to choose BD over HD DVD.
In addition, "DVD" is a recognized technology that everybody understands and it is the next logical step up from DVD now that we're seeing more and more HDTVs instead of just regular old TVs. Blu-ray doesn't really spark an interest in most consumers, especially after the sticker shock.
Hell, just check the Amazon.com sales rankings comparing Blu-ray to HD-DVD....
http://www.thedvdwars.com/index.cfm
Blu-ray doesn't come close to the sales of HD-DVD's