I just got my first HDTV and I'm so glad I did. It's only a 32" but I'm ASTONISHED at how fantastic my DVDs look on it (and my current DVD player doesn't even upscale, or have HDMI).
My next DVD player will be a blu-ray player. Why not? A blu-ray player can play and upscale all of my current DVDs, and I can find the occasional great deal on blu-ray discs- I recently got the first 6 James Bond blu-rays from Amazon for $6.60 each! (I always buy the media before I have anything to play it on :-P ). And I can rent the blu-rays that are too expensive to buy.
I was a bit underwhelmed by the way the picture looked on the HDTVs in the stores, too. But when I got mine up and running and made a few tweaks (ALWAYS turn that noise-reduction feature OFF!) I was really surprised at how fantastic everything looked. I only get about 6 channels in HD, but it's great to finally watch some of my favorite shows in hi-def.