This.I don't even remember the last time I watched a dvd if i'm honest... For me whether or not it plays DVD's is completely irrelevant.
Besides that, they are going to use their own format once again, 25gb discs of some sorts.
I bet that Nintendo's custom format is a derivative of HD-DVD, like the Wii and GameCube were derivatives of DVD. So someone might hack something together that lets it play HD-DVD's - as if anyone has any HD-DVD movies, anyway. I know that a homebrew DVD player ended up coming out for the Wii, in any case.