It really depends on the transfer and the source. If the source is TV then you'd best be hoping they mastered it on film or one of the newer HD tape formats, otherwise it's going to look ugly from the start. But even then, the love of modern TV directors for a gritty appearance is a real problem. Anyone who expects the HD-DVD of Battlestar Galactica to be much better than the DVD transfer is in for a nasty shock - all that seems to have happened is that the digital grain that ruins the series is now crisper than ever before.
But the people doing the transfers seem to be responsible for the remarkable number of shoddily mastered Blu-rays and HD-DVDs. Blacks that aren't black is a real bugbear. Not to mention the seriously ugly 25Gb Blu-rays in circulation. Strangely, although HD-DVD only offers a bit more capacity than the 25Gb disks, I haven't seen so many bad transfers to HD-DVD - perhaps it was Sony's decision to master early Blu-rays in MPEG-2ovision?
At its best Blu-ray and HD-DVD are *MUCH* better than their DVD equivalents. Hopefully as the switch is made to 50Gb disks and better encoding they'll all start showing their true colours (quite literally).
And the movie studios are really liking the switch to 50Gb because they're planning on selling the same movies to early adopters - this time as they always should have been seen. Step forward Disney...