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All I have to say is this is just painful to watch. The longer they take at releasing anything is going to hurt the adoption rate. I'll wager that people won't care too much about either Blu-ray or HD-DVD and just skip this generation of media.
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I'd wager you are right. I won't pony up on either format until some things happen:
1) There is a clear leader in the format wars. Wasting $1000 on a Beta-type loser isn't my definition of fun.
2) There is a PC-based (read: HD media burner) way for me to legitimately back up my (sure to be) more expensive movies. Children and fragile discs do not mix, despite however careful one might be. And I'm a firm believer in fair use, and anti-piracy.
3) It becomes clear that one format or the other will not screw over consumers who have HDTV's that don't have HDMI (w/ HDCP). This junk about not outputting over Component is pure BS, and completely unacceptable. If both formats enforce that, then I hope both fail miserably. These are CE companies behind these formats that also conveniently make HDTVs. In the interest of business and consumer good will, they should not screw people over.