I wrote this back at some point in 2008, but mentioned it recently here, so dug up the original piece and added a few updates.
High definition TV has a problem; the difference in quality between standard definition video in digital quality (ie. DVD, digital TV etc.) and high definition TV/Blu-Ray just isn't a big enough jump to get excited. Unless you're either playing games on next-gen consoles (PS3, Xbox 360), hooking up a computer to the TV screen or buying a really big screen (40" and up), you're just not likely to see that much of an advantage in high definition just yet.
Personally, I'm a bit of a fan of high definition TV- I even almost enjoyed Spiderman 3 when I watched it on Blu-ray. (Almost…)
But there is a leap coming; Philips have made it. [Update: The link no longer works - probably because Philips abandoned this part of their business. Here is Wayback.org's archive of how it used to look.]
3D television, on what looks pretty much like a normal flat screen television. No glasses or special kit- just a TV that shows stuff in 3D that lots of people can watch at once. I've seen it, and it looks great. More exciting than this guy makes it look, anyway. [Another update - this used to be a picture of a bored looking guy watching some bubbles coming out of a 3D TV.]
It works using lenticular technology- that's essentially the technology that makes those corrugated cards that change what you see when you move them around. I won't pretend to understand it any further than that ("magic science!"), but it works.
You can watch content that's filmed in 3d (all you need is 2 cameras side by side to do it), or ordinary 2D film that's been put through a special "blue box" that does some more magic science [UPDATE - again, dead link; Wayback.org archive] and transforms it into 3D. Alternatively, computer games will work well on it- because the computer is already building a 3D image, it's just an extra layer of information that's required (a bit like an alpha layer, for those who are familiar with computer graphics), so it shouldn't be long until PS3/Xbox games will work with it. (PC games are apparently easy to convert- I saw a bit of Lego Indiana Jones up and running, which was pretty cool.)
I think the main appeal in HDTV sets comes from the flat screen that lets you have a big screen that doesn't take up the space in the room that an old cathode ray tube set takes up. Also, there's the advantage of feeling future proofed- that when TV takes the next step and becomes high definition, you won't need to go out and buy a new set to keep up. In other words, it's not really high definition that people are getting excited about just yet. It's not like the jump from black and white to colour, or from walkman to iPod. It's nice, the colours are more lifelike, the picture is sharper, but it's not an "oh my god, I've got to buy all my DVDs all over again" kind of leap. (Plus there's the confusion about how to get it- the right channel, the right content, the right set top box, the right cable, and the right TV is enough to confuse most people. I've seen a number of people watching standard definition TV and thinking it was high definition, but the point is that you wouldn't have made that mistake with black and white and colour.)
Personally, I won't be holding my breath to buy a 3D set for a while; it's going to be a couple of years before the sets find their way to the consumer market, and another wait (as with HD) for the actual content that makes the most of it.
The only drawback with the 3D screen is that while "normal" 2D pictures can be shown on the sets, they don't look as good as a normal flat screen. There's a really cool head tracking system that fakes 3D for one person that's worth a mention- but that's still just a 2D image that you can look around and interact with in a 3D-kind of way; a fancy controller, rather than a fancy display. (Great for single player games, but not so good for watching a film, or playing games with other people.)
But those who know me will know what I'm waiting for, and given that I'm still waiting for the blu-ray versions I don't think it will appear this side of 2012."
[Final update - it was announced in 2010 - 2 years after I wrote this blog post - that the Star Wars films were going to be converted to 3D, and the first Star Wars film to be released in 3D was The Phantom Menace in February 2012. Apparently the others have been postponed until after the new Star Wars films have been made.]