My home theater refresh is complete now.
I started with the TV, replaced my 43" Samsung DLP with a 60" Sony SXRD KDS60A3000 (CircuitCity $1800). Then I realized that my receiver won't work with the TV, so I bought a new receiver Sony STR-DG910 (CircuitCity $380). Then I realized that I won't be able to take advantage of the magnificent 60" display without having some more HD channels, so I upgraded to DirecTV's Choice package which offers about 36 HD channles (most broadcasting at 1080i). Then I realized that I also need a High Definition DVD player. I decided on HD DVD because it is cheaper than Blu-ray. So I bought a Toshiba HD DVD player (HD-A2C, Costco $170).
The only component of my "digital" Home Theater I didn't replace is the Bose speakers, and I don't see any reason to replace them. For my current setup they are more than sufficient and I'm not yet sold on the advantage of 7.1 audio over 5.1. Also, most of the current HD DVD titles are in 5.1, so even if I add two more speakers, they'll remain unused.
I'm still going to keep the tape deck and the VCR just to watch and listen old tapes.
I took the plunge and voted for HD DVD and against Blu-ray. Usually I would have waited out the HD DVD vs. Blu-ray battle to settle, but it's taking too long now and there's no end in sight. Also there are literally hundreds of HD DVD titles now available, so why wait? Check out http://deepdiscount.com
I already have 8 HD DVD movies (The Departed, Unforgiven, Superman, Goodfellas, The Fugitive, Blazing Saddles, Fantom of the Opera, The Last Samurai).
I have also ordered Planet Earth and Batman Begins.