Well its to bad about BD, but HDVideos on-demand is a good idea.
Only problem with that is that, AFAIK, its 720 only.
Not that I want to hi-jack this thread, but why do M$ think BD is absolete?
Anyway its a matter of time, before DVDs will not be produced any more, and the way I see it, BD is the sucessor to DVD.
Not sure that DVD will disappear any time soon. Not everyone has a HD screen, hell the vast majority in my country don't, and even if they do DVD's scale pretty well. And some of the newer DVD realeases are encoded at higher bit rates and can look quite good.