If you're on any kind of a budget and still want to enjoy the beauty of high-definition movies on disc, you'll have to decide between HD DVD and Blu-ray. The question now becomes: which is the horse to bet on? At this point in February 2008, from the perspective of the editors at CNET, the answer is still: neither. CNET is recommending that you refrain from buying any Blu-ray or HD DVD player--or movies--in the immediate future.

Why we're still waiting
Why hold off? The list of caveats is lengthy indeed:

Slim selection of movies
Even after nearly two years on the market, both Blu-ray and HD DVD suffer from a dearth of titles. Several studios have pledged to support each format, but that actual list of titles still pales in comparison to what's available on standard DVD. And as with DVD, just because a studio owns the rights to your favorite movie doesn't guarantee that it will be released any time soon--if ever. So even though Blu-ray now has the exclusive support of 70 percent of movie studios, there are still only about 400 titles actually available at the beginning of February 2008. For comparison, Netflix has more than 90,000 DVD titles available. That means the benefits of going Blu-ray right now are still pretty limited.

Price deflation
It's bad for manufacturers but great for consumers. Everyone knows that, if you wait long enough, prices for home electronics eventually head south. HD DVD players are already comparatively inexpensive (under $150 in stores) and will likely continue to drop in a last ditch effort to beat Blu-ray. Blu-ray players are still considerably more expensive, but we've seen some progress as Philips has announced the $350 BDP7200 and Funai pledged to release a Blu-ray player for less than $300.

The possibility of Draconian copy-protection
Anyone with an older HDTV--one without an HDMI or HDCP-compliant DVI input--is at the mercy of the studios' whims when it comes to watching HD DVD or Blu-ray movies at full high-definition. The content providers (studios) have the option to down-res or image constrain the output over the component-video jacks to 960x540--better than DVD but only 25 percent of the full HD capability of 1,920x1,080. Thankfully, most of the studios--Sony (Columbia/Tri-Star/MGM), Fox, Disney, Paramount, and Universal--have publicly stated that they will not initially make use of the image-constraint token. If true, movies from those studios will display at 1080i resolution via the component outputs. Still, the studios could reverse course at any point, so those with older HDTVs could theoretically be living on borrowed time. After almost two years, however, this issue hasn't surfaced yet (aside from some isolated accidents).

Recorder allure
Why not wait until Blu-ray or HD DVD recorders are available? With DVD recorders widely available for less than $150, it's a compelling question. But while HD recorders are certainly coming eventually, this may be the least compelling reason to wait. HD DVD and Blu-ray recorders will likely be so loaded with constrictive digital rights management technology that it will be nearly impossible to actually record any high-def programming.

HD alternatives
With Apple TV, Xbox Live, Vudu, video-on-demand, and pay-per-view outlets already offering high-def movies, why worry about physical media at all? Let's just skip the next optical disc format and jump straight to the next phase of home video: downloadable HD movies.

DVDs are still pretty great
They're cheap and plentiful, not to mention a single universal standard. And even though they're limited to a mere 480p native resolution, they're still the best-looking video source on HDTVs outside of actual HD sources and maybe some of the latest video games. From a picture-quality and convenience standpoint, the move from DVD to HD DVD/Blu-ray isn't as compelling as the jump from VHS to DVD was.

The big exception: Sony PlayStation 3
There are plenty of reasons to not buy a standalone Blu-ray player, but almost none of those apply to the PlayStation 3. The 20GB version comes in at $400, making it one of the more affordable Blu-ray players on the market. Even though it was released back in 2006, firmware updates have made it Blu-ray Profile 1.1 compliant--and we fully expect it to get another firmware update to make it Profile 2.0 compliant. And to top it all off, it offers high-definition gaming and digital media streaming over a home network. That's a deal that's hard to beat.

On the other hand, there are a few drawbacks to using the PS3 as your main Blu-ray player that may chafe home theater fans. It lacks IR support, (which means it won't work with a standard IR-based universal remote), onboard decoding for DTS-HD Master Audio soundtracks, and multichannel analog audio outputs, which means you can get high resolution audio only via the HDMI output. But even with these nitpicks, the PS3 is an excellent choice for the majority of home theater buffs.

Advice for the early adopter
Of course, we know that there's a small army of early adopters out there intent on buying one or the other--or both. If we were forced to choose--given all the caveats listed above--which HD format would we opt for? We've been hesitant to choose a side before, but as it stands now, we'd put our money on Blu-ray. Unless something drastic happens--such as Microsoft buying a movie studio and making it go HD DVD--the chances of HD DVD staging a comeback are looking increasingly unlikely. For the reasons we listed above, mainstream HDTVs owners should still hold off, but the best bet for early adopters it to go with Blu-ray--and they should probably go with a PS3.