It's a shame the BD side is using greater storage space simlpy for the extra space an old codec (mpeg2) requires. This is why they are getting trounced in the first battle. HD-DVD at half the price, more titles and better quality.
BUT, this may change in round 2, a lot of BD mfg. releasing players soon (with VC-1 codecs now showing in their software) and only Gen2 Toshiba and RCA will have HD-DVD players in time for the holidays.
It's still early in the war but HD-DVD scored a standing 8-count in round 1...IMHO.