I'm not really impressed with either format, so I'll wait till the 3-D format comes along.
That being said if I were to get one it would be Blu-Ray. I would get a Sony PS3 w/60GB. @~$500US right now. It's probably the best deal. You get a Blu-Ray player, a 3.2Mhz PC w/wi-fi wireless, and it plays games, all for ~$500, I think it's a steal at that price.
Heres the features:
Sony PlayStation®3 (60GB)
60GB hard drive: This PS3 console includes Memory Stick/ SD/ CompactFlash slots, Wi-Fi capability and a 60GB hard disk drive (HDD).
Blu-ray: This next-generation media format delivers the ultimate high-definition entertainment. With more than five times the storage capacity of standard DVD, Blu-ray offers gamers larger, more interactive and sophisticated environments to immerse themselves in. The PS3 is the only console with a built-in Blu-ray player.
HDMI: High-Definition Multimedia Interface (HDMI) offers an all-digital audio and video interface between any compatible device, such as DVD players, A/V receivers and other HDMI compatible monitors.
Cell Broadband engine: Sony has created an advanced microprocessor unlike any other. Up to eight cores help balance the processor's workload for more powerful and efficient performance.
Backward compatible: In conjunction with PS3's hundreds of new titles, you can play thousands of PS1 and PS2 games as well as connect your PSP for gameplay and data transfer. Also, play your DVDs and CDs on the PS3.
Online compatibility: Sony is offering an online option with their PS3 that will remain free to users*.
Multi-axis motion sensing: Found in the new PS3 controllers, the multi-axis motion sensing system provides seamless interactive operation as well as the ability to maneuver the controller as a natural extension of your body.