Please read the Joe Kane article in Issue 3 of the Widescreen Review Newsletter (sign up here). Joe is the industry expert on video playback, and he has some very telling comments to make about what is broken about Blu-Ray: why its picture quality is so poor, and why its audio abilities are so limited.
He is very positive on HD DVD, with only one suggestion on how to improve that format.
I assume the interview is or will be in the printed magazine, but I gave up subscribing a few years ago when it turned into "D-VHS fanboy magazine". I might have to take another look now: I always liked their technical content, but the D-VHS bias drove me crazy and the actual quality of the printed magazine was low.
As #3 seems incredibly slow in turning up, here are some of the key points Joe brings up:
"Sony MPEG2 encoders are at least part of the image quality problems of Blu-ray"
"I don't think you'll see any studio releasing dual-layer Blu-ray discs in the near future"
"Apple tried to get VC-1 thrown out of Blu-ray" (but failed and Panasonic's player cannot be released as it didn't support VC-1)
"the better codecs that are mandatory in HD DVD players are optional in Blu-ray"
"It sort of looks bleak for Blu-Ray"
"The D-VHS execution of MPEG2 is better than Blu-ray"
Joe's only real ding on HD DVD was to do with the color space used by the Toshiba player.