to answer several questions and matters not in order of appearance
I think Blu-ray already won.
With 95% of studios backing it now (SonyColumbiaTriStarMGMBuenaVistaTouchtoneMiramaxDimension20thCenturyFoxBandaiWarnerBrothersNewLineParamount) (:-P)
DVDs obsolete? maybe in a decade or 2? but i dont think obsolete would be the word, VHS tape is still being used today, and DVDs like CDs and DTS-CDs and DVDs and DVD-As and SACDs are all 5" optical media like Blu-ray is so in a sense they're like from the same family tree or something so as long as there's digital players with multi-wavelength lasers, microchips, and 5" trays, there will be some use for all of them. If Laserdiscs had been 5" im sure they might been playable in various DVD players today
Btw theres many LDs that have features/supplements that haven't been included on DVDs till this day. I'm sure Lars is happy about some of those
And of course nothing beats a deluxe 12" x 12" box with 12" x12" booklet art. Certainly not a 5" x 9" amaray case
I think an 8x improvement in picture quality from Blu-ray to DVD is much more than the 3x improvement in picture quality from DVD to VHS (or the 2x from LD to VHS) but that's just me, i grew up used to Cinema big screens, I don't like to watch movies at 9 feet away from 27" TVs, they look like stamps then, i like them to be 6 x 15 feet at that viewing distance

(For Cinemascope ones

) That way i relive the directors intention of a Cinematic experience instead of just watching a "video". Ben Hur in a 50" TV? nah
The eye's more or less practical visual limit at that size/distance is around a 2000 vertical scanning lines (it could see up to 4000+ vertical lines but the visible diference would be like only 2% better

) so that's why 70mm films were kinda the practical limit in Cinemas, no need to go to 150mm, 70mm films were more or less at near the visual limit so that's why them (and Disney's use of Technirama) were the ultimate

, 35mm films are roughly like 1000 lines on average Cinemas and 1000 lines is still a good enough sharp picture to the eye, and that's Blu-rays current spec, just look at Corpses Bride and Sin City, both "filmed" (photographed digitally) at the same resolution of Blu-ray.
I'm sure there's lots of paintbrush detail on Fantasia.
unless its Digitaly noise reduced
DVDs, with 500 lines at best and 250 at worst, is just like 16mm. But Hollywood movies are not 16mm quality. They've always used 35mm or better.
With a 1000 lines you can throw a digital image as big as a a Theater house screen and it still look great. And get the whole emotional impact of seeing Kong as he really is. Not a tiny monkey in a picture frame
Will 1000 lines be the ultimate quality? there could be some improvement in detail with a 2000 line system (Sony's Professional Digital Projector for Filmakers is already 2160p) we can bump up the frame rate to 60p (instead of 24p) and add 3-D. And there's holography where you can practically look around objects as if they were there

. But that'll take another decade or twoo or threee
I've shrunk 35mm 2000 line scans to 1000 lines and compared them at nice viewing distances and there's not much difference. You get to see a lot more of the 35mm film grain tho

on the 2000 line scan
And as much as i adore 70mm movies which would benefit most from a 2000 line delivery system, there's really not that many of them and they (and Cinemascope ones) are the ones actually faring the worst on NTSC DVD, being (depending on aspect ratio and either 4:3 coding or 16:9 coding) on average just 300 lines tall on DVD (barely twice as tall than the strip below) so jumping from that to HDTV is a big improvement (8x the quality) for them, and then again, the mayority of movies are 35mm.
Runco is already making HDTV displays with 21:9 wide images (great for Cinemascope and 70mm ratio films) Technology will always be in progress
This morning 2099net and I were discussing the possibility (till now vaporware

) that PS3 and Blu-ray might have 120Hz refresh outputs for future TV Displays (some puter monitors do 120 now) so that would make things shot on videotape at 60i after being converted to 60p look awesome. SuperLive. But that don't affect Hollywood films so far.
Going back to DVDs, (told you, this was not in order

) DVDs are great, thery're digital, they're convinient, they're available, they have 16mm quality and a Digital 16mm at that

) which is great compared to what we had before, they're better than those 8mm Castle Films 5 minute digest versions of movies you could buy many years ago (and project in 50" screens way before Home Video ever existed) and probably better than seeing an optical 16mm copy of a film in an University retrospective showing. Thats why we like them so much. They the best consumer thing at the moment. For now.
About old VHS if you treasure them i'd archive them at least on DV tape or file system (not DVD) using a pro 3-D motion adaptative comb filter

or wait to transcribe them to BD-Rom at one point.
I'd talk some more but I need to see some stuff on UD
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d's reaction at seeing art censored on UD