The Economist has a good analysis of the current format war between HD DVD and Blu-ray discs. If you want to learn more about the software and hardware available for both formats, the AVS Forums are a good place to go.
Amazon currently has a very nice deal on the Toshiba HD-A2 HD DVD player, which they are selling for $238.88, plus you get three HD DVD movies free, shipped with the player from Amazon (from a list of 55 movies), plus you will get five more HD DVD movies by mail from Toshiba (from a list of 15 movies).
I have had the Toshiba HD-A2 (which is their entry level player) for about a month, and I have been very happy with it. It is a 2nd generation HD DVD player that does 1080i (not 1080p). Toshiba’s 3rd generation players are supposed to be coming out in about a month.
HD DVD players do a great job upconverting standard DVDs to near HD DVD quality, so they can be used as a replacement for your older, standard, or progressive scan or upconverting DVD player. HD DVD players are much less expensive currently than Blu-ray players, and the manufacturing costs for the discs are lower. The resolution of the war will probably depend on what happens with Hollywood studio support and in the retail channels, and what happens with Sony PS3 price reductions.