Yes, under the perfect circumstances, when you're in a soundproof room with an amazing speaker setup and sound system, you can tell the difference between a 320kbps MP3 and a CD, but then hardly anyone is in that situation when listening to music. More often than not their either lounging about in their living room, on the street listening to the mp3 player or in their car driving down a motorway. Perfect conditions are hardly ever available, low quality mp3's are fine for me as long as, like you say, there are no artefacts.
But we're getting off topic here. With movies, visual artefacts are easier to see, a low bitrate for encoding a movie will show up as such in things like big action sequences or any time something is fast movie/fast changing. With a higher density in the Disc (which is really the defining factor between CD's/DVD's/Blu-Ray and HD-DVD) it's easier for there to be a higher bitrate with the encoding. Basically it'll get to such a point that we'll "Home Cinema" might actually mean something.
Like I said before, a lot of distribution companies are in talks about releasing DVD's at roughly the same time, if not the same time as cinema releases. With technology being what it is, why have a giant screen TV when a projector can do the work for you (at the moment they're expensive, even with upkeep because the bulbs cost so much and don't last very long). Get a decent sound system and you'll never have to visit the cinema again (and really, apart from the good picture and sound, what reason do we have to go to begin with?)
Personally, I'm holding out for this
, just to quench the thirst of my inner Geek.