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I am in no way affiliated with Toshiba and I do not own an HD DVD player or any other Toshiba product that I can think of. I have done a lot of looking into purchasing an HD player and to be honest I really believe for the consumer if the content was equal for both that HD DVD is superior. I did not hide that in my analysis, but my analysis is based upon as much information as I can find, not the fact that I like the color red better (I actually prefer blue).
I am not sure what you are referring to with Type 2 Discs. I haven't seen anything that references them. Unless you are referring to 3-layer disks. They will probably never be implemented they were just an attempt to negate the only advantage BR had (capacity) the 3-layer disk is 51GB. BR has talked about having more than 2-layer disks as well. Both BR and HD DVD physical disk specs were built with this possibility in mind (yes, we don't know whether or not it would require new reading hardware or not). I sincerely doubt that disks of this sort would ever be put out for the compatibility reason that you mentioned (but I could be wrong).
Again, I agree that I sound biased. What is the difference between biased and informed? I sincerely believe that HD DVD is the more consumer friendly/ready format. Here is another way that it is better. BR has higher royalties that HD DVD. How much? I don't know. Would it significantly change the cost of a movie? Probably not. (It would come more into play in the computing world (blank disks), but that is a completely different topic, so lets stay away from it.)
I really don't care who wins as well, but right now I can buy a fully functional HD DVD player for $200 (HD-A30). I probably will not be able to say the same about BR for another two years at the rate the prices are coming down. I actually disagree with your analysis of who has the most to lose. If HD DVD loses, the format dies and yes they are out a bunch of money. If BR were to die Sony must continue to produce BR disks. The number of disks made will still be proportionally small for just the PS3, which means that they may never get to reduce manufacturing costs for games down and end up losing developers, further hurting the relatively weak PS3 sales. Although I think the PS3 and BR will do alright. The only question is do we wind up with two video formats or does HD DVD die out?
My comment on DRM is very loaded and misplaced for this conversation. DRM is treating customers as thieves. I agree some protection should be there so it isn't incredibly simple, but in both BR and HD DVD when they make new disks they can make them unplayable by older recorders (what decrypt keys are allowed and not allowed). This is somewhat scary because they can cause your older player to be obsolete so you have to buy a new one, just because they say that your old one is insecure. I would assume they would only do this in rare occasions, but it is quite scary. It does however, show the need for the ability to update the programming (thus the network port works nicely for that, but downloadable disks work as well).