The initial version of Sony's Blu-ray Disc-authoring software shipped with support for only 1 video-codec: MPEG-2. Consequently, all launch titles were encoded in MPEG-2 video. A subsequent update allowed the content producers to author titles in any of the 3 supported codecs: MPEG-2, VC-1, or H.264. The choice of codecs affects the producer's licensing/royalty costs, as well as the title's maximum runtime (due to differences in compression efficiency.) Discs encoded in MPEG-2 video typically limit content producers to around two hours of high-definition content on a single-layer (25 GB) BD-ROM. The more advanced video codecs (VC-1 and H.264) typically achieve a video runtime twice that of MPEG-2,
with comparable quality. (wikipedia)
I am not a HD video codec pro , but in one article from 'Robert Haron' from PC mag stated that VC-1 is very good for high compression of videos and more suitable for internet distribution and streaming. Sony used MPEG-2 and lossless audio intially because they can afford the big sizes in the Bluray disc. Initial releases of Bluray were inferior in visual appeal when compared to the HD-DVD releases, only because they didn't remaster and enhance the orignal video like th HD-DVD people did. Excuse was that they want to provide buyers with the tru copy of the experience the film-maker intended to. Currently i think both mediums are doing their job pretty well so i wont judge any medium as better of two.
goobimama said:
Also, Blu-ray is supposed to be very susceptible to dust particles on the disc.
early discs were susceptible to contamination and scratches and had to be enclosed in plastic caddies for protection, Blu-ray Discs now use a layer of protective material on the surface through which the data is read.
The coating is said to successfully resist "wire wool scrubbing" , several videos have appeared on YouTube of people testing these claims. The results seem to support the fact strongly.