1. The technology was soooo different from VHS to DVD, that it was clearly noticeable. At a Sony press conference, people were ooing and ahing a demonstration of the PS3's Blu Ray player in action. Until a reporter walked up and ejected the disc afterward to discover it was simply a movie burned on DVD-R. No HD whatsoever. They couldn't tell the difference but pretended they could. And, with the current equipment that most people have, they still won't.
2. People did not need to buy a whole new TV for the difference to be noticeable. You need an HDTV for this difference to really work well. The monetary investment differential is much more significant this time around. Before, you bought a player for a couple hundred dollars and some cheap movies. Now you not only need the player, but either a new TV or a dumb-down signal translator for your old gear for a couple hundred (and why bother with that? If you're going to play on an old TV, there's no point in owning an HD-DVD player).
3. The shift to DVD promised people the opportunity to buy any and all new movies the very day they are released to video stores unlike with VHS where it could be upwards of six months to a year before you could buy a reasonably priced tape to own. No such change will exist with DVD>HD-DVD. It will still be the same day. No big difference. That was a HUGE selling point for me.