To tell you how strongly I feel about this, I will not be rebuying my whole DVD collection on Blu-Ray or HD-DVD (whichever wins). I will only replace something like LOTR or maybe a DVD I have that breaks or something if I really love the movie. Sure there is going to be an increase in quality and it is a little noticeable, but IMHO it is not worth all of the extra money. For me, it just gets to a point where I say that it looks good enough. Also, we don't even know which HD format is going to come out on top. Odds are in Blu-Ray's favor, but they may have some major unseen issue that comes up. I also don't believe either format is going to be a big success rifght off the bat. PS3's will be Blu-Ray Players, but the X-Box 360 won't be either format (stupid on Microsoft's part IMHO).
I also don't know if the X0 transfer can be made HD quality ready because I don't know if HD capture cards really exist yet and how good they are if they do.
I'm sorry if this seems like a rant. I just think a high quality DVD release will be better than what we've had up to this point. I say worry about HD when the time comes. Due to the confusion of many consumers trying to pick between two different formats and the cost associated with each, I think the time when it will be commonplace will be later than sooner.
Patrick