The drum has been beaten. Blue-ray capable game console from Sony called PlayStation 3 has been released to US market Nov 16. The high performance game console is equipped with Blue-Ray developed by Sony alliance. Will the same story of Betamax v.s VHS format be repeated? I don't think so.
First, the physical dimension of both discs are about the same. Secondly, it is digital era, whilst in Betamax-VHS war, there was only analog. In digital, signals are easire to manipulate, so there is not much difference in the encoding. Besides, some companies even have developed with Blue-Ray and HD-ROM capable drives.
The market will decide which one will win. But, unlike in Betamax-VHS case, the loser will not really lose and vice versa.