not necessarily dead... hinges on the market penetration of large sets though (50” & up). I have one of the best upscaling players available at any cost, and there is still a significant difference on larger displays vs bd. with 50” 1080p panels breaking the $1k barrier this Christmas, it may still have life yet. I am not a fan of HD downloads yet... the picture quality is still very marginal (worse than a good upscale), which makes sense, as the hd on-demand bit-rates are usually less than that of a good dvd. there is only so much you can do with data by interpolation :)
More than that.
I have an upscaling DVD player in the living room, a regular DVD player in our bedroom and one downstairs in the rec room. I also have a portable DVD player, as does our eldest rug rat. Then we have a DVD player in the back seat of the van.
If I have a choice between buying a $35 disc I can only watch in one room of my house, versus a $15 disc I can watch in six different places, plus my PC, plus rip it to my Palm TX, it will be, and has been, an easy decision.