Although Microsoft is one of the main supporters of the HD-DVD format, there are doubts regarding Vista's native support for it.

Ce-pro.com quotes a Microsoft spokesperson who says that „Vista's architecture will recognize both HD DVD and Blu-ray DVD; however, current plans for Media Center support of either of these formats is unknown at this time. We do know that there will be a great HD DVD and Blu-ray DVD experience for Media Center either at Vista launch or soon after as either an extensible application or natively in MCE."

Although the above quote is a little bit cryptic, one can easily draw some conclusions. So, the new OS will support both high-definition formats, but Microsoft might turn to a third-party application to achieve it.
The enigma is when this implementation will be done and it's likely that initially Vista will not support the two competing formats.

Two days ago, Microsoft announced that it was halting the development of the Expression Graphic Designer to focus on Windows Vista's release. If one combines this with the fact that Windows Vista will not support EFI booting, a logical question arises: What are the programmers working on in the Redmond laboratories if the new OS will not include many of the promised features?