Right now the digital media world is in the midst of a format war. In the red corner, supported by Toshiba, HP, Microsoft and Kenwood, storing up to 30GB of high-definition video, stands the HD-DVD format. And in the Blu corner, supported by Sony, Samsung, Panasonic and Philips, and with a capacity of 50GB, stands the Blu-Ray.
Honestly, it is too early to tell who will win this one. VHS beat Beta, PC beat Macintosh (although the Mac came back), yet there is almost no difference between these two formats, making it impossible to predict the outcome. The quality of high-definition video and sound is equally fantastic on each of them, and so far the larger capacity of the Blu-Ray hasn't really given it a big lead.
This competition has been closely linked with the Xbox 360-Playstation 3 one, as Microsoft's Xbox has an optional HD-DVD external drive, while the Sony Playstation's built-in drive uses Blu-Ray. And both of them play their respective high-definition formats quite well, doubling as complete DVD players.
In fact, the only thing that does separate them is the amount of titles released on each format. So far, Blu-Ray has a head-start, with more than 330 titles released, as compared to HD's 130. And if anything might be the deciding factor in this war- the race to release more titles just might be it.
If HD-DVD is what you want, I'd recommend the Toshiba HD-E1, which is also very strong on playing regular-format DVDs. But if you'd rather go for a Blu-Ray model, the Panasonic DMP-BD10A won't disappoint you.
For now, though, you might want to consider a sort of compromise that will let you benefit from both worlds. The LG BH100 does this well, and will let you wait out the war knowing you'll have invested in a win-win proposition.