x box 360 has hd dvd and ps3 has blu ray , are these able to play the same dvd`s ie compatible or is it going to be a duel as the betamax was with vcr years ago , if so which is the best option?
yes, it's a betamax vs. vhs thing (except for some players that are being made to do both -- I think LG or Samsung have recently come out with one).
However, both are losing the battle; hard drive storage (or flash based storage, once it becomes cheap enough) and download systems are the future, not discs.
The HD DVD's have a smaller capacity and slightly fewer supporters (movie studio's) but they are much more affordable then their Blu Ray counterparts. On the other hand the xbox 360 doesn't come with one (HD) built in, it's an add-on, whereas all ps3's will have one fitted (bluray), giving that format potentially a larger market share.
I know people who are interested in High Definition content but would not be interested in downloading that content (too long for a big film etc.) - as will be the case with lots of general consumers.