More storage space has proven that it does NOT help Blu-Ray look by as evidenced by this real world data... Look for yourself:
Nature's Journey 18gb/37mbps VC-1 BD25 vs 12gb/26mbps VC-1 HD15:
http://www.mbmg.de/hd-discs/naturesj...-vs-hd/01.html
No significant difference despite BD having over 10mbps more bitrate.
Flags of Our Fathers - 32gb AVC BD50 vs. 20gb VC-1 HD30:
http://www.mbmg.de/hd-discs/flagsofo...-vs-hd/01.html
No significant difference despite BD taking up over 10gb more space (much higher avg/peak bitrate).
The Prestige - 20gb AVC BD50 vs. 16gb VC-1 HD30:
http://www.mbmg.de/hd-discs/theprest...-vs-hd/01.html
No significant difference despite BD having significantly higher peak and average bitrate.
The bottom line is, the new AVC/VC1 codecs do not benefit from the extra space and bandwidth Blu-Ray offers; many BD fans have repeated this mantra but when asked to provide real-world proof such as screenshots demonstrating the difference, they cannot primarily because the difference is nonexistant. These nextgen codecs plateau in quality at some point, and that point arrives well within HD DVD's space/bandwidth territory. The Blu-Ray format was engineered based on a Sony MPEG2 recordable format, therefore its bandwidth/space specs match up mostly with what is needed for top notch MPEG2 quality. HD DVD was engineered with AVC/VC1 in mind, therefore its bandwidth/space specs match up mostly with what is needed for top notch AVC/VC1 quality. Studios aren't going to be able to pull a rabbit out of their hat a year from now and all of a sudden there will be some significant gain when right now a 10mbps+ increase in bitrate over what is possible on HD DVD does jack squat for the image when using AVC/VC1; if anything, HD DVD will benefit more with time because the plateau will simply be reached earlier as encoders become more efficient and require less human involvement. There are diminishing returns with these new codecs after some point, and that point is well within the capabilities of HD DVD.
As dugpa noted, Ramer made a giant oopsie with his current article and (pseudo) "technical" explanation, and he was called on it shortly after it was posted by some technically inclined folks in the HD software forum such as myself. The only reason BD has better than average looking discs is because BD releases have been much more centered around big budget recent blockbusters while HD DVD has had a big focus on older catalog titles and newer low-budget releases which obviously don't have masters that look as nice; this is simply a result of the differences between what exclusive studios on each format are able to offer - Universal did not have as many recent big-theatrical budget titles as Disney/Fox/Sony did. Paramount going HD DVD exclusive should help balance the scales in this regard, as they have a lot of big budget blockbusters like "Transformers". "Video anamolies" that most note when dealing with a title that has been encoded with nextgen codecs are generally a result of a problem with the master, not a problem with the encoding or space/bandwidth available - therefore Blu-Ray offers no tangible real-world benefit with its increased bandwidth/space.