From my own experience of Blu-Ray discs, the differences mainly become apparent when your HD screen is larger than 32". I have seen this on a friends' screen.
Larger than this and you can see the limitations of DVD encoding whereas Blu-Ray (with a decent transfer) looks good on even a 65" screen.
So if your screen is smaller I would stick to DVD for now and buy an upscaling player (which you can get dirt cheap now).
As for £25 a disc - this is only the case if you decide to patronise rip-off high street shops like Virgin and HMV. They did the same with DVD, which were also £25 when they first arrived in shops. If you shop around online you can get Blu-Ray for as little as £12.
To be honest at the mo the choice isn't that great so it's best to wait anyway unless you've already bought a PS3.
Having said that, all you Arnie fans will be pleased to know that Total Recall and the first 2 Terminators are already out on Blu-Ray hehehe
