From NYTimes.com: Blu-ray: The Future Has Been Delayed

The end of the format wars clearly did little to boost Blu-ray's prospects. Like others, Mr. Rubin said the much cheaper upconverting standard DVD players are winning consumers' hearts and wallets.

Sony may have assumed with HD DVD dying that it had won the format war.  But, what Sony needs to realize is that the war isn't over yet.  Now, it's a battle against upconverted DVDs, Internet downloads, Cable and Satellite TV.  If they were smart, they'd aggressively push down the cost of the Blu-ray players to get as many customers to adopt this format as quickly and make money on movie sales later.  Right now, customers are just waiting and in the meanwhile trying the other alternatives.

I found out recently that the Xbox 360 upconverts DVD's and while not HD quality, it's still acceptable to watch.