Don't worry SD DVDs will be around for quite awhile. The newer DVD players upconvert SD discs to near HD quality, (http://www.oppodigital.com/). So you do not have the guess who will win the format war between Blu-ray and HD-DVD.
As far as quality both of these newer formats output HD signal, meaning 720p, 1080i or 1080p. As such you will not notice much diff in viewing. There are other differences to be knowledgeable of here, however, not including costs.
Blu-ray
Storage capacity 25GB (single-layer)
50GB (dual-layer)
Transfer rate 54Mbps
Content provided by:Warner, Paramount, Fox, Disney, Sony, MGM and Lionsgate
Hardware support from: Sony, Panasonic, Philips, Samsung, Pioneer, Sharp, JVC, Hitachi, Mitsubishi, TDK, Thomson, LG, Apple, HP and Dell
Blue Ray is installed in the PS-3
HD-DVD
15GB (single-layer)
30GB (dual-layer
Transfer rate 36.55Mbps
Content provided by: Warner, Paramount and Universal
Hardware support from: Tosheba
As of November 2007, HD DVD has the advantage in maximum disc capacity, 51 GB triple-layer versus 50 GB dual-layer) but no titles have yet been released on the triple-layer format. Blue Ray is said to be developing a 200 MB disc, it's unknown at this time whether the final specification will be compatible with current players. As of November 2007 44% of Blu-ray titles use the 50 GB disc and 56% use the 25 GB disc while almost all HD DVD movies are in the 30 GB dual layer format. Both HD DVD and Blu-ray Disc support the 24p (traditional movie) frame rate . In terms of audio, there are some differences and there are also regional coding differences. Blu ray arguably holding the competative edge at this point.