Yes, VUDU has the capability of 1080p Hi Def content and has lined up three big content providers already (and has signed all eight of the majors for basic stuff.
That is great. The $400 for a VUDU box that will probably last 3-5 yerars and a rental fee of $1-4 for basic and $5-6 for high def VUDU rentals seems a lot cheaper to me that $800 for a Blu-ray and an additional $800 for a HD DVD and a DVD buy price of $30 a flick. With 15 bought hig def movies, UI could have paid for a VUDU box and had the box free for the next 4 years. It seems to me that you should now think that high def DVDs are going to be far more expensive than VUDU. It's true that we're comparing rentals versus movies, but I buy one flixk for every 40 I rent. How many people will spend $30 a flick when they can rent it for a fifth of the price?

Yes, I typed it wrong. They use RF so you can put the box totally out of sight and don't have to aim the remote. They also do have high def capability with HDMI connectors.
I read that little VUDU closed deals with all 8 majors movie studios and 20 independents, whereas the studios that own the content don't like Apple or the Apple store and provide content from only 3 of the major studios. (See the first NYTimes article.) I think the much greater content with VUDU will make a difference. I read (NYT) that VUDU will launch with 5,000 films and have 10,000 loaded in less than a year. I am sure they will also have the 50,000 TV shows (24 hrs a day times 40 years) that Blockbuster and Netflix say they have as part of their big numbers brag. I think the movies will count and the TV will not be big, for anybody. Apple will be a strong and worthy competitor and may or may not be the winner, but they only have 3 studios. You can't forget that Apple weakness. I love Apple generally, but like to see more competitors in any field. Competition is good for consumers. Maybe VUDU is raising the bar with instant downloads, high def, better graphics, more content, and you don't have to stream through the computer. That's pretty good for a startup to be able to provide all of that.

I've done beta on this. The graphics are fantastic and the movie choices get much better each week as they add it. They use an IR remote instead of infrared so you don't have to aim the remote. No box to stack. Put the box in a drawer or attic out of sight and you never see it again.The remote has only five buttons and a slick and fast scroll wheel. Click and the movie is ON. It has a WOW factor that only those who have used it can appreciate. It is really fast. I also like they have HD right at the start. You won't have to buy a second box later to get HD, like TIVO did. Also, you can either rent or buy without any monthly fee. Apple should have done this, but they didn’t. With Apple, you have to buy it, download for 45 minutes the day before, then stream it to the TV, and quality is not great. Apple talked rental for two years. None yet. I read that only three of the media people will give movies to Apple, but little Vudu somehow made deals with all eight studios. This is even better a lot better than Netflix, which I've always liked a lot. It takes me 30-60 secs to make up my mind with Vudu. Click. One second later, the movie is playing. That's what I call service.

I've done beta on this. Graphics are fantastic. Content gets better each week as they add it. They use IR instead of infrared so you don't have to aim the remote or stack the box. Put the box in a drawer or the attic and never see it. You wouldn't want this on a universal remote since one of the best things is the VUDU remote. Only five buttons and scroll wheel, which rocks. BETTER than apple interface. Click and movie is ON. It has a WOW factor. I like they have HD right at the start. Don't won't have to buy a second box later to get HD, like TIVO. Also, you can either rent or buy without any monthly fee. With Apple you have to buy; you can't rent. Also with Apple, you have to buy it, download for 45 minutes the day before, then stream it to the TV, and quality is not great. This is even better than Netflix, which I've always liked a lot. Takes 30-60 secs to make up your mind. Click. One second later, the movie is playing. That's what I call service.