As I understand everything, all film shot in 35mm is by nature better than HD resolution. Full HD, 1080p is something around 2 megapixels. To get the full 35mm image resolution in digital format you need something like 20+ megapixels. So anything shot on film can be transfered to our current high def specs no problem. Remastering these films to HD will provide better quality compared to VHS or DVD now. The reason a lot of old films can't look as good as knew films, has to do with the equipment used back in the day when shooting, converting to HD won't improve that. You can't improve on what was never there. In a good 30 years when UHDTV rolls around with a resolution of 7,680 by 4320 which is something like 32 megapixels, then it'll be better than the 35mm equivalent today and be shot in a different format(65,70mm? not sure).
As far as rebuying all your DVDs in HD that's pretty much what you have to do if you want the benefits. Everyone had to rebuy their LPs in cassette, then cassette in cd, and now even sacd and dvd-audio. My family hopped on the bandwagon a little late, and we don't own that many movies anyways, we mainly just rent. Switch to HD DVD won't be much of an issue if the players aren't ridiculously expensive.
The big problem I see is that I a lot of people won't care. I mean all the format switches past have been completely new mediums. The HD movies are still just on a disk and a lot of people out there (ie. my dad) are gonna be like I really don't care about HD DVD, if I put the movie in and it plays and I can see it on my TV, then that's all I'm concerned about.