Blu-Ray discs are a new and improved technology that is capable of storing up to 50GB or so on a single disc, making them much better in the capacity sense than a conventional DVD or even a dual-layered disc. In THEORY, I would imagine that this would allow less compression and more raw video content, resulting in better quality, more features, and less restrictions on what can be included in a single disc.
Now... looking at Wikipedia... It was a moderate amount of reading, but very interesting. Blu-Ray gets its name from the fact that the laser used to etch data onto the disk is blue (having a shorter wavelength than the red lasers they use for CDs and DVDs). I was correct about data capacity being up to 50GB, which equates to about 9 hours of high-definition video or 25 hours of normal video. It supports the usual codecs for movies and whatnot; however, this doesn't mean that it's limited to it.
Blu-Ray is currently in competition with HD DVD discs in a sort of storage media "war, " trying to oust the DVD format. Blu-Ray has one thing really going against it: the fact that mass production may NOT be cost-effective. (When will we be watching 9 hr HD movies?) HD DVD is cheaper, but falls short to the Blu-Ray with just 15-25GB of storage.
I would imagine that both storage formats would find a niche in today's advancement in technology. If I had my say, HD DVD should take over the standard for DVD movies and such, and Blu-Ray should take a hike for a little bit from the entertainment department, instead focusing on creating another storage means for PC users until we develop better codecs that allow even less quality to be compromised when writing to one of these discs.
Just my two cents.