DVD is adequate, and for the price and hassle differences I will stick with DVDs for now. That chart looks interesting and may be a good guideline, but I can see a big difference between 480p and 720p on my TV when watching digital cable. I know, it's not the same as DVD vs. Blu-Ray, but it should still be valid. My TV is a 32" 720p LCD HDTV and I sit about 10 feet away. Right on the edge between no difference and starts to become noticeable. Even at 15 feet, well in the supposedly equivalent range, I can tell the difference.
I rip my DVDs and transcode them to H.264 with even more detail loss (which I can't see). In the end, blu-ray would likely give a slightly noticeable better picture but I doubt I'd enjoy the movies any better. What would make a huge difference is a bigger TV and 5.1 surround sound (my old surround sound was part of a 5 disc DVD changer that I threw out a while back).
Until ripping Blu-Ray movies is as easy as ripping a DVD movie is today, and I can buy them for the same price I pay for DVDs, I'm happy to stick with DVDs.