SDS are the future (if nothing else comes along!). It's what the modelling apps mostly use and they can be very economical memory-wise. The key strength with HOS surfaces isn't necessarily mem-savings (which can be very high depending on complexity) but the degree of adaptive rendering. They basically have 'infinite resolution' that you tesselate to output quality, meaning easy LOD with the same source detail as close-up models. On the PC, HOS would allow more complex models on better hardware, using the same art assets as low-end machines, without the artists needing to worry about poly counts too much (though they will have to factor in low-level tesselation looking pretty manky if they're not careful).
The major drawback is processing requirements, plus interpolation/tesselation errors. I'm not sure how these are a concern in a realtime environment though.
Am I right in thinking OGL 2.0 has HOS support, and Collada too? Are we now in a position where, if someone writes an interpolator or other rasterizer, artists can directly use their HOS development models in game?