I'm rather surprized how fast DVD will be eclipsed. CDs had a 20-year run, and their main competition (for now) is iTunes.
I'm further impressed that no cartridge or caddy will be needed. Supposedly, they're just using a harder plastic on the disc's surface.
Since DVDs are certainly sufficient for most people, I'll bet that Blu-ray will be adopted mainly for data storage. Movies will instead be streamed or follow an On-demand model.
The real question will be whether the movie studios will come to regard the viewing public as a customer rather than an enemy.
If I buy a DVD, there's no way the vendor can decide to censor it retroactively. What's on the DVD is what will always be on the DVD, assuming it's well-kept.
Movie companies don't like that notion; they'd rather have a 'pay for use' model than an 'ownership' model. This despite the fact that customers clearly favor the ownership model.
If the movie companies don't allow people to OWN movies on Blu-Ray or HD-DVD, I don't think many people will buy them.