HD DVD will be around for a couple of years, but the concept that it actually ever stood a fighting chance is highly questionable. Historically, no company with a proprietary product has had much success in the CE market place. The talk of the iPod is great, but it really isn't locked out of the MP3 format, it's just one of many that are a part of the format - and it has real competition.
HD DVD is Toshiba. It isn't 'competition' the way that Blu-ray is. Some people claim that Blu-ray is Sony, and there is no doubt that Sony is the keystone to Blu-ray, but the fact that almost every major CE manufacturer is actively behind Blu-ray has always given it far more chance for success than HD DVD.
IMO - Neither format is close to proving itself to be survivable, and HD DVD was, and always has been, well behind Blu-ray. Only through studio support has HD DVD gotten this far along the line.
Yet, we will see the format for another couple of years.
The WB decision was, what I consider, the fatal wound. It's now just a long drawn out period of the format bleeding out. We likely will see Universal and Paramount go neutral prior to this holiday season - unless Paramount rides out their contract ($$$$!) or Universal got a new one. Yet, I think that what was inevitable 18 months ago is now finally being realized by all.
CE support + studio support = more retail support and more press support = more consumer support
HD DVD, for the fight it gave, only had a chance if WB went exclusive. Since that didn't happen, it seems that the market is calling for a quick end to this and a quick end means Universal and Paramount going neutral (not exclusive) because that gives Blu-ray 100% studio support.
Then, it will just be a matter of time before every studio goes exclusive and HD DVD disappears.