FUD, (not Elmer P.)
Consumers tend to be risk-averse. When FUD (Fear, Uncertainty, Doubt) creeps in, most wallets close up like they're stuck together with industrial-strength Velcro. Warner's incentive in developing this new format is to eliminate the risk (the FUD) in consumers' minds about which format will "win" the war. With Total HD, consumers can safely buy a movie in full high definition 1080p resolution on a THD disc, play it on either format player, and know that it will continue to be playable in the future even if one format becomes more prevalent, and they upgrade to a different format player some time down the road.
In addition to Warner, both HBO and New Line studios have pledged their support to the new format, and new THD titles should be coming out in the second half of 2007. When queried directly, a New Line executive hinted that the popular "Lord of the Rings" series may be an early title on the new format ("it's a high priority title for us" were his exact words). And that is what I believe will lead to success of high definition discs in general - the availability of popular movies in high definition.
In terms of the specifics, Warner said there is no reason to believe that they will have any storage limitations over and above the standard limitations of "pure" BD and HD-DVD discs. In other words, a single THD disc with a 30 GB HD-DVD side and a 50 GB Blu-Ray side is perfectly feasible.
In addition to studio support, retail chains such as Circuit City and Best Buy are enthusiastic about the new format, because it means half as many SKUs (items) on the sales floor, and less risk for potential high definition software and hardware buyers. Consumers can start building their HD movie collection now, knowing it will continue to hold its value... at least until the "next big thing."
And anything that can help bring high quality movies home to consumers in high definition formats is a good thing in our book. Kudos to Warner for leading the charge to put HD in the hands of more people.