My advice: Wait. Broadcomm just came out with a chip that can decode both HD-DVD as well as Blu-Ray, and Ricoh just came out with a blue laser read head / mechanism that can read both formats. If you can wait for HD movies for 12-18 months, this whole format battle should be a moot point as hybrid drives become available. Both LG, Samsung and Pioneer had hybrid plans at one point but have put them on hold.
That said, I couldn't wait. I already had an Xbox 360, so I bought their $199 add-on for HD-DVD. Movies cost around $20 at Target, or $25 at Best buy.
Can all formats be played on the same machine? If not, it is outrageously expensive to buy, for example, a Blu-Ray player. Any advice, except robbing a bank or larceny, will be considered. Thanks