Blu-ray is really just the evolution of the DVD to the next level. Blu-ray discs have about 5 times more storage capacity than current DVDs. (25GB for a single-layer disc; 50GB for a dual-layer disc.) Those numbers mean you can fit about 9 hours worth of High Definition video, and about 23 hours of standard definition video on one dual-layer disc. Currently, seven of the eight major studios support Blu-ray, including Disney. Sony's Playstation 3 is the best way to get a Blu-ray player right now, and you get a pretty good gaming system in the deal.
There is a competing format called HD-DVD, and as mentioned by another poster, the two formats are in a battle similar to the old VHS vs. Betamax ordeal from long ago. The HD-DVD format offers 15GB for a single-layer disc, and 30GB for a dual-layer disc. The only major studio that supports HD-DVD exclusively is Universal, although a few studios, like Warner Bros. and Paramount (I think) are releasing titles for both formats right now. There is also an HD-DVD accessory available for Microsoft's Xbox.
Buy a Sony PS3, get a Blu-ray player; buy a Microsoft XBox, add on an HD-DVD player.
Don't be confused by the names, both Blu-ray and HD-DVD are made to play High Definition video (1920x1080.)
Both formats have advantages and disadvantages. And although the Blu-ray format is currently "in the lead," it will definitely take a while for this to shake out. There are a lot of politics, smoke & mirrors and cheerleading going on in this race. And it is pointless right now to be considering a purchase unless you also have an HDTV to go along with it. If you do, and you don't care anything about gaming, it may be wise to wait until Christmas time, when prices are sure to have come down, and we may be closer to choosing a "champion." Movie availability (the studios) will most likely decide the outcome here, as who wants to buy a player that has no movies to play? However, just as they played a major role in the previous format battle between VHS and Betamax, the adult film industry seems to be falling into the HD-DVD camp (most likely for cost/production reasons.) Will their hefty influence be able to tip the scales toward HD-DVD? Stay tuned to this bat channel! There is also pressure from the retailers who don't want to take up shelf space with 3 different copies of "Harry Potter", (standard DVD, Blu-ray, & HD-DVD.)
No matter which format eventually "wins," the consumer will be getting substantially better pictures, sound, interactivity, and storage space. Are you ready to buy your third copy of "Peter Pan" in High Definition?!
Buy an HDTV now, (since broadcasts will be HDTV only by Feb. of 2009 (if I remember correctly)), and enjoy the HD broadcasts right away. Then add one of these players once the smoke has cleared. Or just buy one of both, and you'll be covered!
Psst! If that's not enough to think about, don't forget about High Definition video streaming directly into your home on demand, and onto a hard driveŚno DVD, Blu-ray or HD-DVD required!
Alright, enough babbling from me. If anyone wants to add something, please feel free...