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According to what I have read, Sony will be using MPEG-2 for their own releases, which unfortunately includes Fifth Element - one movie I was definitely interested in.
I have issues with MPEG-2. For starters, it's well-known that MPEG-4 AVC allows one to get roughly three times as much video as MPEG-2, which translates into better quality for the same bandwidth. More to the point, MPEG-2 (on DVDs, at least) introduces painfully apparent artifacts which I would very much like to see disappear. I've watched many videos encoded with H.264 now, and I can say that the artifacts I associate with MPEG-2 (and inferior versions of MPEG-4, for that matter) are essentially nonexistent with this new codec. I refer generally to "ringing" and such, but more particularly to my two biggest beefs with MPEG-2:
1) Terrible, terrible black detail. Take a look at any Fifth Element DVD you'd care to name. When the two Mangalore ships thrust away from the camera towards the lone Mondoshawan ship, their engines generate a bit of smoke/mist which fades quickly. On the DVD, thanks to the poor black detail characteristic of MPEG-2 encoding, this fading smoke looks like somebody's breath mist disappearing from a window. In a proper HDTV encoding I happen to have, recorded from digital cable, the smoke fades like one would expect smoke to fade. This is just one readily identifiable example among countless manifestations of this problem with MPEG-2.
2) Something I think I will call "traveling contours". This one can be blamed on MPEG-2's poor detail across the entire spectrum, chroma and luma. You can see it readily enough if you watch video of any slowly fading in/out moment. Rather than the scene fading uniformly, the codec thinks the whole scene is moving along edges defined by differences in brightness, and because of the low resolution of both chroma and luma, you can actually SEE the boundaries between these edges. Also apparent in non-fading scenes like sunsets.
It is because of problems like these that I will not be purchasing any of Sony's BluRay products until and unless I have determined to my satisfaction that their implementation of MPEG-2 has somehow overcome these issues - and not merely by virtue of being higher resolution. That's not good enough. I already have a great HDTV version of Fifth Element.
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