This thread got very large, very quickly. I read/skimmed through most of it, but I just wanted to add my two cents.
And I say all of this with the assumption that Revolution will not support HD, which may or may not happen.
HD might not be important now. We are also talking about a console that won't be on the market until the middle of 2006 and will supposedly last until 2011. The adoption of HD capable sets has been phenomenal and will continue to grow as prices fall. Sure high definition is not that important now (nearly summer of 2005), but it seems ridiculously shortsighted to say that it won't be important 2 or 3 years from now, especially as broadcast networks and next-generation optical media bring more HD content to the masses.
Every generation has a buzzword that becomes important when marketing the system to the masses. People are easily swayed by their peers. They will buy what their friends and family recommend. Ever wonder why Xbox got so popular among the college aged kids this generation?
The early generations fought over 8 or 16-bit processors. Last generation introduced "online" to the marketing vernacular. This next generation will introduce "HD" to the gaming masses. Without it you'll be viewed as old technology. And yes people will purchase new HDTVs to replace their perfectly capable SD television just to keep up with the Jones' next door.