Personally I feel BLU-RAY will overthrow HD-DVD.
HD-DVD is slightly cheaper to produce therefore the end disk will be cheaper to the consumer - BUT - think outside the box.
With BLU-RAY supporting much larger capacities it open's a massive market for people wanting larger portable storage mediums. BLU-RAY R drives have been out for a decent amount of time and as people become more aware of it's capability it's becoming more popular. As BLU-RAY blooms prices will also drop making it furthermore appealing. In addition to that, BLU-RAY has much greater backing manufacturer wise and film studio wise - not to mention massive support from the PS3!
Then we move onto Movies and games - this is where I think DVD proves it's limitation.
Currently you have films with various extra's, sometimes spanning over several disks with various interactive content and such. There is a lot of new technology being developed to make our whole movie experience more enhanced through various processes. One of these that comes to mind is the new Ambx technology (similar to Philips Ambilight but more immerse) which is currently being coded into a selection of games and soon, films! This will allow the audience from the comfort of their armchair to feel breeze or wind and be completely immersed with surround sound and lighting effects my means of fans, Ambx lighting and such.
Yes, we are currently a decent way off seeing these in every household but it's just a matter of time - for starters this coding couldn't be carried on a DVD.
I realise a lot of this are if's and but's and maybe's - but what in your household right now, that's classed as technology didn't go through that stage.