I was recently at the local Sony outlet store and they had a bunch of BDP-S300 players for $250 (refurb). I almost pulled the trigger, but I thought about how often I use my DVD player. With the large amount of HD premiums I get from DirecTV, I almost never buy or rent DVDs.
I think once the prices of players hits $100-150 it will be tempting enough to buy one.
By the time the price on the standalone players, recorder drives, and blank media become reasonable, digital downloads will probably become the more attractive option.
I actually watched a movie on Vudu this weekend in HD. I was expecting it to be not much better than the SD version, but I was pleasantly surprised. The movie wasn't what I would expect from HD DVD or Blu-Ray, but it was reasonably close to what I expect from DirecTV. It's pretty astonishing such quality can be streamed from the internet so rapidly. It will only get better.