Well, I may be biased since I've been watching hi-def movies and TV for almost the last year by way of digital cable, but I think the difference between even anamorphic widescreen DVD and true hi-def is clear to anyone with eyes. The detail level is just that much higher - high enough in some cases to reveal the limitations of the original film media. Also colours are better rendered in the hi def format, and more realistic. I'm not really a videophile, but I think anyone can appreciate a better quality picture. I mean, how many of the people reading this are still using a VGA (640x480) video card and monitor? And it definitely becomes noticeable when you go to large screen sizes, which are increasingly common. Everyone says the same thing: once you've seen a movie or sports on a decent sized hi-def screen (with a true hi-def feed), you don't want to go back.
Technically, you're right: true HD is better - but I've found that an anamorphically-encoded DVD rendered through an upconvert engine produces an excellent picture on a reasonably-sized HDTV (42-50 inches). And - as you note, the potential for additional quality is frequently limited by the specifications of the source material. Old film prints, even digitally remastered can look grainy or fuzzy. So, as I said, I don't think HD DVD or Blue-ray is worth it at $500-$999. Now, when you can buy one at WallyWorld for a buck and a quarter (in two years' time), I'll be right there in line!
Good post. I am hooked on HD. I record alot of the movies on HBO and Showtime HD. I get the great HD picture (which is breathtaking compared to even the digital cable feed) and dolby 5.1 audio which is also available on my cable system if you invest in a fiber optic lead. I plan to do this until the HD DVD thing works itself out. I can live with the picture quality of regular DVDs until then. I would sure pay a couple of hundred bucks for Hi-Def DVD but not a grand.
I watched the replay of the US Open on ESPNHD last nite. Nothing like watching golf (or any sporting event) in HD. I hope the weekend telecasts on the broadcast network is also in HD. I have those set to record so it will be a good weekend of playing and watching.