Blu-Ray looks amazing, especially on a Plasma (or LCD). We have the Blu-Ray of The Wizard of Oz. It is just an amazing, absorbing experience; the only thing I can compare it to is seeing it in a movie theatre. We also have the first few Harry Potters, and the clarity of the details, even to the corners of the screen, are astounding.
But be aware (you probably already know) that these discs will not play on a regular DVD player. So if you want to watch your favorite movie on the road, say on a laptop, you're probably out of luck. The smarter studios, such as Disney, are now packaging their movies as a 3-pack: in one case, you get a regular DVD version, a Blu-Ray version, and a download version (to watch on your iPod). But most still don't.
Here's an example of a Disney 3-pack: Princess and the Frog