Blu-Ray to date has more titles, and the "quality" of these titles is a matter of opinion. This is arguable however because a dozen or so of the Blu-Ray titles have been discontinued, and some of them were REALLY bad MPEG transfers. Case in point The Fifth Element; it was so bad that Sony had a free mail in program where you could mail it back for a replacement transfer that was created because of the controversy over its quality. My friends Remastered Platinum edition DVD actually looked better than the 1st generation Blu-Ray.
Secondly, region encoding isn't something that I would call anti-consumer. Its a basic measure to cut down on foreign bootlegs, and was something that most DVDs have had throughout the years. I've never ran into an issue with it, although I'm not into buying Japanese manga bootlegs or stuff like that. Most consumers will never have a problem with it.
I would also add that the rental store market (at least in my neighborhood) is almost exclusively Blu-Ray. For example, the HD-DVD version of Hot Fuzz (it was a Universal title, so it didn't come out on Blu-Ray) was heavily backordered on Netflix. But I was anxious to see it, so I decided to try and go rent it. I went to 6, count 'em 6, movie rental places in my neighborhood, and not one of them had a copy, or even one on order. I didn't even see any HD-DVDs to rent. Everything was Blu-Ray. This of course could change with the strategic partnerships between the studios and rental corporations constantly changing, but that is the current situation.
Both formats are going to be around for a long time until one format gains a monopoly on the studios, or the studios decide to offer both formats on everything.
Sorry, but all the figures I've seen show that you are incorrect; HD DVD has more than 300 released titles and counting since September, and that's without counting the many HD DVD releases from Europe and Japan of both American and foreign-language films (which will play in any HD DVD player, hence the advantage of not having region coding, which has always been anti-consumer despite your apologetics) or 'adult' titles (hey, just mentioning it, as it's the chosen format for many XXX producers), while Blu has not, to my knowledge, even cracked the 300-release barrier. If you know differently, show me the figures.
The desireablity of one title over another is, of course, purely a matter of taste; for me, Paramount, Universal, and Warner's have far more titles I enjoy than does, e.g., Sony Pictures.
I went to 6, count 'em 6, movie rental places in my neighborhood, and not one of them had a copy [of Hot Fuzz - a great flick, BTW], or even one on order.
It's unfortunate that you couldn't find "Hot Fuzz" in your neighborhood. It's in rental stores in my neighborhood, including Blockbuster, which is supposedly Blu-Ray exclusive (and the exec who made that deal was canned, shortly after Paramount went HD DVD exclusive). But few rental stores carry anywhere near the entire inventory of HD media, whether it's HD DVD or Blu-Ray, which is contributing nicely to the Netflix bottom line.
I don't think the format war will last for years, though; Fox and Disney have 'stuck' with Sony because of promises about advanced content that Sony just hasn't kept - thus explaining the dearth of titles from those two studios, and the continual cancellations of announced titles (Fox has released virtually nothing in the last year; almost every title they announced was later cancelled). I believe there's a rational limit on the studios' patience with Sony's broken promises, and that limit is fast approaching.