Its hard to know at this point. Target, Blockbuster, and Best Buy are lining up with Blu Ray. Walmart and Sams are with HD-DVD, and Netflix and Circuit City are neutral.
Blu Ray hardware is problematic in general and hasnt incorporated ethernet connectivity, unline HD-DVD players which have. Waterdowned PS3 dont have enough memory in the hard drive to truely pull off Blu Ray DVDs with interactive features. Blu Ray has the studio output in the US 90% vs 60% of all titles released. European and Asian studios largely produce HD-DVD disks but not blu ray.
In the end, I * think* HD-DVD will come ut on top due to its lower cost structure. But its going to be long and ugly it seems. Sony marketing is excellent actually I find. The equipment however, lags HD-DVD players in general, and changes are causing early obsolescence for early Blu Ray adopters ( poor folks).