If you want an example of somethings that BD-J will do that iHD can't, or atleast, no one is aware of.
1) Download new trailers, subtitles, and other content to the disc. Network access from BD-J allows any features you want.
For example, recognize what you think is an actor, but can't remember his name? Overlay IMDB looked up information in onscreen popups. Link to RottenTomatoes and rate movies as you watch them. Chat with other people watching the same movie. Skys the limit.
2) Frame-accurate synchronized animation rendered-on-the-fly.
3) Integration of broadcast and disc distributed format. BD-J is a superset of DVB-GEM. The same movie menus you get on the BR-DVD can be had on the broadcast version.
Of course Microsoft and their lap-dog HP is going to be pro-iHD (Intel probably too), because Microsoft gets a license fee everytime it is used. I'm sure MS has great things to say about VC-1 over H.264 as well. This is a very PC specific world view, tied into the Wintel monopoly. From HP's point of view, they want to leverage their existing investment and relationship with MS, so why would they want to rock the boat and go with Sun, which would only piss off Microsoft.
Remember, Microsoft lost a billion dollar lawsuit to Sun because MS was attempting to thwart Java's success by breaking contractual obligations they had before Java took off big (MS agreed to produce a standards compliant VM back when Java was not a threat to Microsoft)
MS also doesn't like Flash, and Amir trash talks about Flash too, even tho, hands down, Flash is the best system, bar none, for designing interactive content, thats why almost ALL movie sites on the internet for new movies are done with Flash. Hollywood loves Flash. Amir is selling us a nirvana of an HTML-like language, with SMIL-style time annotations, and JavaScript. Well, we have that today, and guess what IT SUCKS compared to Flash and Java for during fancy interactivity.
HTML+TIME, HTML+SMIL never took off. HTML+SMIL+SVG. All destroyed by Flash.