It's worth bearing in mind that your older films and such aren't particularly relevant; you can make your own call about whether or not you'll replace your favourites for the new high-definition versions (which I'm sure will eventually be replaced by even higher definition versions).
The real relevance of this discussion is of course about the future. They're not going to keep making games on DVDs indefinitely; I don't about the US, but here in the UK it's almost impossible to find a new game that's on CDs rather than a DVD, and it's been like this for at least two years.
The same will eventually become true of Blu-Ray or HD-DVD, at which point you need to decide: do you pay a load for both players so you can enjoy all games/films on the market, or do you stick with one and miss out? And since the prices of the players (and discs) are dictated by supply and demand, the early adopters of the technology that ultimately loses (and paid a load for it) will get burnt.
It's a ****ty situation, but it happened before with the whole VHS/Betamax thing. Whatever the case, some technology is going to become dominant and unless an affordable player that can read them all comes out (since a Blu-Ray player is £600+, unlikely) we're going to have the make the choice at some point whether we care about the quality/capacity or not.
That or just go without new films and games.