The Real World
SD is far from dead. In the broadcasting world is one thing. But in the corporate world we have a way to go. Corporations cannot upgrade 2000 computers every two years.
I have had clients, first ask me the difference between a DVD and a CD, and then wonder why their laptops could not play a DVD - no DVD drive. This was less than a year ago. This is not a criticism or a sign of ignorance - it is a sign that the consumer world and the corporate world run at different speeds.
Our final product is a SD DVD. We sell a lot of SD DVD's of our products and a good number of MPEG-1 based CD-ROMs.
Our more recent CD-ROMs use F4V Flash video, but alas it is still 720x480.
We see some HD in the convention industry, but often a SD DVD is simply being blown up on a 70" LCD monitor. The only times HD is shown at a trade show there is usually an XDCAM deck or hard drive playback involved - rarely.
Acquisition
We try to shoot in HD as often as possible, because the resulting SD image looks better IMHO, and when a client says "hey, can we get this on Blu-Ray?" we'll be ready. Also the video stills from HD are pretty nice.
http://farm4.static.flickr.com/3529/3197403509_0db002caa5_b.jpg
Let your market demand the format. Just because you never see non-Blu-Ray DVD players advertised in your Sunday newspaper anymore doesn't mean there are 100 million players out there. But that is the consumer world. Aside from weddings and mass market video content, a lot of video production (non-broadcast) is geared toward the user base of SD players.
What Does the End User Want?
Most video content we produce is likely played on a computer - so there you are relying upon drive speed, video card, monitor, screen savers, and background processes. I know you can play a pretty sharp DIVX file off a CD, but your average corporate user does not necessarily have the latest up to date computer or video player, and certainly no Blu-Ray compatible drive.
Thus, I for one will not give you any heat for admitting to using SD to conduct your business. If you are shooting docs for national networks, then...well obviously you are not since you would be doing that in HD.
Obviously for your business at this point in time, SD makes sense.
I always say "if the client is happy, I'm happy." My clients usually don't care about what technology we use, as long as they get the final product they want.
Keep the end in mind and you can't go wrong.
Mike Cohen