I did many comparisons and much research into AV technology (and have been a fan for decades). I'm well aware of the resolution improvement, but there's a limiting factor most people overlook: unless you have a 50"+ screen or sit closer than 2.5 metres for 42" or smaller, the ability to see the improvement in a normal lounge room setting is severely limited.
I tested my own choice of content side-by-side on the same 42" screen using DVD and Blu-Ray in selected AV stores (where they let you do that sort of thing) - at my typical viewing distance of 3.8 metres, and the difference was miniscule, notwithstanding that the quality of DVDs varies from disk to disk. Most lounge rooms are 4 metres or more across and most large-screen viewing takes place at a distance of >3.5 metres eyeball-to-screen.
Then there's the limitations of current Blu-Ray technlogy that make me reluctant to invest. Films are recorded (or transcoded/mastered) in 10- or 12-bits per channel colour depth and this is expected to improve in future, whereas BOTH consumer formats (DVD and Blu-Ray) are limited to 8-bits per channel - equivalent to 24-bit colour or better known as 16.7 million colours - that is not true colour (despite marketing to the contrary). You can see this limitation in annoying colour banding (e.g. a sunset scene, where the sky has distinct bands). The HDMI 1.3a specification makes provision for up to 16-bits per channel colour (named "Deep Color"), but most equipment currently in circulation does not comply with HDMI 1.3a or the colour portion thereof (most, probably all, are still limited to 8-bits per channel). Even if new screens all come out with full HDMI 1.3a compliance, the Blu-Ray players don't yet comply and BDs aren't encoded with the data. There's a truckload of issues to sort in the recording -> transcoding/mastering -> encoding/transfer -> playback -> display pipeline before I'll throw yet more money at AV equipment.
Given the above limitations, and the leaps and bounds occuring in broadband and video-on-demand, I am loathe to be left owning quickly-outdated disc formats yet again. I'll stick with relatively cheap DVDs (which do look pretty darn good on my equipment) until the path ahead is clear - and I'm hoping that path permits avoidance of owning any unchangeable disc formats.