Wow! This announcement has caused a seismic disturbance on the High Def Digest message board -- 16 pages of responses to this news in less than two hours! I can only imagine what's going on at the AVS Forum.

This is not like the Paramount/Dreamworks announcement, which basically brought HD-DVD closer to parity with Blu-ray. This is the defection of HD-DVD's top selling studio, one of the format's early champions, and the only remaining major neutral studio. Warner has been in a tight partnership with Toshiba since the two companies successfully developed and marketed the DVD format. This split is significant.

I think it might only be a matter of time before Universal goes neutral, and Paramount/Dreamworks follow suit after the clock runs out on their HD-DVD deal.