Both formats over full HD support for resolutions of 720p, 1080i and 1080p. The problem is that different studios are supporting different formats so one of your favorite movies may come from Universal supporting one format while Sony studios supports another. Look at this comparison here:
http://reviews.cnet.com/4520-13817_7-6462511-1.html
This is just VHS vs BetaMax all over again and one standard will come out on top. Personally I will wait for one format to become the standard before adopting. There are combo players but they are crazy expensive and since I don't buy movies I don't need an HD player until Blockbuster and Netflix start carrying the new formats. And I don't think they will adopt until a standard is defined. Otherwise they would have a store full of movies in different formats depending on the studio that released the movie.
Looking at the specs I like Blu-Ray only because of the extra capacity that the disc holds. This would allow better picture quality without the need for higher compression when the movies start getting really long. I can't wait for them to finally get a standard defined. For now I would just look at an upconverting DVD player and enjoy the picture that develops until this settles out.