Last I heard all studios except those contorlled by Sony are supporting boht HD-DVD and Blu-ray. Blu-ray drives are available for PCs, but you can't get the media for them - that's where HD-DVDs advantage is, their manufacturing process is much more similar to the existing DVDs. Looks like we will have to wait a a year to see which one "wins".
Remember that next generation DVD tech is more than capacity. The interactivity that can be achieved with the Blu-Ray platform is quite powerful. Regarding the comment of the VM "Apparantly it's some private slow-ass J2ME style VM for running stuff on the DVD menus.", that is not exactly true
In fact the current CDC level VM's have roughly 80-85% of SE's performance. If you have not seen a Blu-Ray demonstration, you should
VERY cool stuff can be done there. In fact, it may be a great platfrorm for "simpler" games. How about having a market opportunity that may reach not only the PS3, but millions of "plain 'ol Blu-Ray" players all over the world?