Things definitely aren't looking good for HD DVD. Home Media Magazine is reporting that both New Line and HBO are abandoning HD DVD in favor of Blu-ray.
A New Line Home Entertainment spokesman confirms reports that the mini-major is following distributor Warner Home Video’s lead in abandoning HD DVD and releasing all future next-generation titles only in the Blu-ray Disc format.

And HBO Video president Henry McGee says HBO, too, is “following the same policy as Warner Home Video.”
If the rumors are true and Paramount does decide to go Blu-ray, I think we can safely say that the format war is over. Without the support of Hollywood, HD DVD has about as much of a chance as HD VMD in becoming the dominant high-def format. If you'd like to read more, the entire article can be found here.