The two upcoming new High-Def DVD formats are seriously competing to be the next standard in video. Blu-Ray discs work by using a Blue laser, which allows the player to read a much higher amount of information at a time, hence high-def picture quality.
HD-DVDs work in a very similar way, also using a blue laser. The formats are different enough, however, to not be compatible with each other. And Blu-Ray is struggling with copyright concerns.
Several companies have already pledged support to one format or the other, including Sony, which says their new PS3 system will use a Blu-Ray drive.
It will come down to one in the end...this article gives several interesting specs and details, but I encourage you to read the Wiki articles linked to above. One of these formats will replace DVDs and will be the one you find yourself using in two or three years. :-)