The Gamerscore blog has a great justifictation discussing the rationale behind the Xbox 360 support for HD-DVD over Blu-ray and Microsoft's rationale behind backing HD-DVD rather than Blu-ray. The commentary is a little bit snide, but I agree with the good points made: Blu-ray is an expensive format that, even if technically superior, delivers no real value over HD-DVD. Additionally, I feel that it is too early to push content in HD for gaming. The DVD-9 format that is currently being used for the 360 is quick and cheap. Developers and distributors are not under the burden that Sony will be putting them under with Blu-ray on the PS3.
Here is a good primer on the HD-DVD medium, there will be more to come on Blu-ray, but the technology is falling behind the quick start that HD-DVD has got. Perhaps HD-DVD versus Blu-ray will be a similar theme to the XBOX 360 versus PS3, a big early lead for the technologies in Microsoft's camp.