As for the HD-DVD/Blue-ray debate... I don't actually own either player. Just like when DVDs came out, the studios think they can charge more for the "better" format. I'm not going to pay $35 for a blue-ray disc, period.
Currently, I'm storing my DVD's on an Infrant ReadyNAS NV+, and playing them with a Mac Mini. Check the jump for the road to this. Also, I've now got a bunch of scripts to manage this, which may or may not be useful to anyone else, feel free to email me for some pointers.
When we moved into the new house, and as the collection grew, we didn't really want to devote an entire wall to the collection. We weren't particularly enamored with any of the various cabinets either. My father-in-law mentioned that his friend had a system in his ski house where all of his DVDs were available over the network to every TV, but it cost something like $30k. I'm pretty sure that's Kaleidescape. Sounds nice, but it just didn't seem like it should cost that much. A friend of a friend had done some work on his own system, using DVD43 to copy the DVDs onto drives, and Windows Media Center and MyMovies to play them. I played with it a bit, but MyMovies was pretty primitive back then (about 2 years ago), and more importantly: DVDs average about 8GB of data. Back then, $1/GB meant you'd be spending $8 to store your $10 DVD, not particulary cost effective. That's when I stumbled onto the Sony 400 disc DVD changer (CX777ES), hooked up to a Control 4 system at a local furniture store. It was hooked up with an Escient Fireball. A quick internet search showed a local "pro" AV shop was a dealer for Escient, so I took a look. At the time, the cheapest Escient Fireball with Video was $2000, and each of the Sony DVD changers was $500... if you maxed the system out, 3 DVD changers and the Fireball, that'd be $3500 for 1200 DVDs, or almost $3/DVD. Better, but I didn't even have 400 DVDs. With one changer, that'd be $6/DVD. I kept looking.
I eventually found the Sony Changer at the Good Guys going out of business firesale for about $400. Someone had reversed engineered the serial commands to control it, so I hooked it up to an HTPC and started inserting discs. Of course, the HTPC was at least as expensive as the Fireball, so I didn't save any money afterall, and it was a lot less useable than the Fireball as well. Eventually, MyMovies supported the external DVD changers, but getting my movie collection into MyMovies sucked. They've made some improvements, mostly for on-disk collections, but it still is just not a system designed to import 200+ discs at once. I found some free DVD data at hometheatreinfo.com, loaded it into MySQL, wrote some scripts to scrape a website which used the data to go from UPC to amazon/imdb IDs, used the amazon ID to scrape amazon's for the cover image. I wrote a quick command line tool that let me put in the UPC code for the disc and the location, and it would download the cover and add the dvd to the my table. I then figured out the DVD Profiler XML format so I could generate it so I could import my collection into MyMovies. It ended up being way too much work, and pretty annoying to add a single disc (with the export/import part), but it worked. Of course, the DVD changer didn't fit in my AV cabinet, so it sat on top. Ugh. It did work pretty well for about a year, though. I even imported the movies into my Harmony Remote at one point, so I could choose from there... if I wanted to scroll through 10 at a time in alphabetical order based on only the first 8 characters of the title...
When I hit 300 DVDs, and the house remodel required I disassemble my AV setup, I decided it was time for a change. There was no way I was adding another DVD changer to the top of our AV cabinet, and the 777 model was becoming hard to find since Sony came out with a newer model (the 997) which didn't have the serial port for control on it. Sony did come out with a 200 disc firewire DVD-ROM changer, which I briefly borrowed from Fry's... I returned it because it was loud, barely worked, and crashed. It was also as big as the 400 disc changer but only stored half as many discs... no good. I also hoped I could use it to rip DVDs in batch... which I probably could have, if it was stable, but it wasn't.
I'd bought a NAS (Infrant ReadyNas NV+, now owned by Netgear), and I decided to start ripping DVDs. I also started playing with converting them to h.264 to play on my AppleTV. DVD43 has been superceded by SlySoft's AnyDVD, which works fairly well. My new computer happened to have two DVD drives, so it was actually fairly easy to just rip discs while I was sitting at my computer doing other stuff. In no time, I had about 70 discs ripped, and then I spent a long time playing with settings for HandBrake, trying to get something that would play well on the AppleTV.
Why does video encoding have to be so hard? There's about a gazillion different settings. On top of that, it turns out Quicktime is a pretty poor player. It sucks at de-interlacing, it can't handle MPEG-2 without spending $70, and even then it can't handle that wide a variety of MPEG-2 videos. It only supports a sub-set of MPEG-4. Also, ipods and the AppleTV are also severely limited in terms of what resolution/bitrate/features of MPEG-4 they can handle. VLC is a much better player, but its just not integrateable. I looked at hacking my AppleTV and using NitoTV, but that seemed like a lot of effort for something that wasn't that slick. I ended up running a batch run of conversions of my 70 discs at a resolution I thought would look ok on the AppleTV but still play on ipods (since I couldn't seem to get something that looked better), but they were actually ipod compatible. Oh well. Took about 3 weeks to convert the 70 discs on my old dual Opteron box. Ouch. Averaged about 1GB per movie, which wasn't too bad.
So, I was debating what would be my front-end for the ripped DVDs. Option 1 was to use a stock AppleTV, rip and convert all of my DVDs to h.264 and import them into iTunes and stream them over the network. This just didn't work that well. I had to have the computer on and itunes running, and then I was going NAS->Computer->AppleTV, which caused occasional network jitters. Worse, displaying the list of ~100 movies on the AppleTV took forever to load. Also, iTunes doesn't provide any bulk-import interface (drag & drop worked best, but still wasn't great) and it would have take way too long to use iTunes to add cover-art and information to all of the m4v files.
Next option was hacking an AppleTV and using NitoTV. Didn't look to be that much fun, I figured it would be easier just to a Mac Mini and FrontRow. I have a Mac Mini.. but its the old G4 version, and was running Mac OSX 10.3.x, so no FrontRow, and no infrared. I looked into various options for remotes, including using my Palm using Sailing Clicker over blue-tooth. It was pretty cool. The final straw was that the network port on the back broke, and it just wasn't reliable to stream wirelessly. Also, I'd wanted HDMI...
So, I started hunting for HTPCs with HDMI. For some reason, everyone makes HTPCs which are the most powerful over-the-top boxes. They usually cost more than $3k, they have 600-1000 watt power supplies, and they usually aren't small. Sony had one, the VGX-TP1, that was "smaller", but still over-priced. I started playing with the latest version of MyMovies... and importing discs was better, but still sucked. It auto-imported my 100 discs, and got about 10 right. Telling it that it was wrong was annoying, and there are way too many steps involved in importing a single DVD, even with the new online service to share data. I wasn't looking forward to going through all of this again.
I went looking for regular consumer devices instead of PCs, but few of them could play DVDs over the network. I bought the Zensonic Z500 because it could. It can, when it works. It refused to work with my wireless network, the interface is horrible, it takes >60s to start up.
Then, Mac OSX Leopard came out. Someone pointed out to me that the new FrontRow 2.0 in Leopard can play DVDs in VIDEO_TS format. Perfect. I bought a new Mac Mini and set it up. The Mac Mini does have digital audio out, though you need a mini-Toslink connector, and its the same plug as the analog audio. Best part is, you can have directories and symlinks. So, I wrote some more scripts to generate a directory hierarchy for 'By Genre', 'By Decade' and 'By Title'. Now, I've got about 200 DVDs online, and everything works really well. I just use the Mac as my DVD player as well. It was a bit annoying to get the Mac to mount the NAS on startup, but otherwise, pretty flawless.
So, the Mac Mini replaced my Oppo upscaling DVD player, my Sony 400 disc DVD changer, and my Windows MCE box, its a fraction of the size, and its easier for my wife to use.