BluRay won't make a game look better. Game graphics have nothing to do with the disc and everything to do with what's inside the machine as far as processor/RAM/graphics processor. The question is will game data outgrow DVD9 this generation? If so, BluRay will be quite the plus to the PS3 as far as games. But remember, Xbox 360 has been out a year, so it's probably only 4 years until the next one. I don't see BluRay/HDDVD hitting critical mass by then, and if they are, just barely, in which case Microsoft can simply include the winning format in their next system.
I personally don't care about HDMI, I'm happy with component and I can't tell the difference between HDMI and component at all. I think HDMI is just a buzz word at this point. But HDMI 1.3 or whatever might be better than component, which is what PS3 will probably have.
I do have an Xbox 360 and depending on the price of the HDDVD add on, I might get one. But if it's like $199, I'd rather just wait off another year for a really good dedicated player from one of the formats (or a universal player).
I could see myself biting at $129 though. We'll see what happens. The end of the year should be pretty interesting for gamers!