Let the hive mind of Engadget get that for you.
"I need help! I want a small pocket camcorder but I'm not sure which one to get. I don't want to fall into the hype of the Flip because I worry two hours won't be enough. What should I be looking for when considering a small camcorder and where can I get a good quality one with expandable memory? Thanks!"
1: Price
This is irrelevant except to the early adopters. Prices will also go down over time until the difference is negligable ... until then next gen. DVD penetration will be minimal anyways. You're also forgetting about the PS3 which will be a BR player and then some ... for about the same pric as that Toshiba. There is no HD-DVD console trojan horse.
2: Perception
Yes, HDDVD makes more sense than Blu-Ray to the consumer. Then again, it makes HD-DVD sound like DVD 1.5 whereas BR is a unique format that is truly next generation. Consider "HD Radio" vs. XM or Sirius Satellite Radio ... which one sounds like the better technology? What im saying is that perception can go many ways. You're simplfying it too much. And, the marketing push hasn't even started.
3: Head Start
Your PS2 vs. XBOX analogy is all wrong. PS2 came out on top for many, many reasons. If you think the first to market advantage was the only thing going for you should do some research on another system that was ahead of its time: the Dreamcast.
4: The PC Market
Remember these guys? They use optical media too. How many PCs are sold on a daily basis. Which format has more support?