Yes, this thread should be merged with the other.
It's the AACS copy protection that is cracked. Not the format. Unfortunately AACS is the same for both HD DVD and Blu ray. Cracking AACS means hacking into the security of both formats, not just HD DVD.
You're absolutely right. If AACS has indeed been compromised, then it would be accurate to say that both formats are on the way to being completely decrypted.
However, Muslix64's method presently applies only to HD DVD, although it's just a matter of time before Blu-ray comes next. I understand that Muslix64's decryption method applies on a per-title basis at the moment, but I'm sure he's working on a complete decryption program that would work on all titles. If he doesn't perfect it, somebody else will.
But note that it's not just AACS for both formats. Blu-ray has an added modifiable copy protection software called
BD Plus from Cryptography Research in San Francisco, as a safeguard in case A.A.C.S. is compromised. I hear that BD Plus is "completely independent" from AACS (
http://corporatemedianews.digitalmedianet.com/articles/viewarticle.jsp?id=55119).
Industry executives say that Microsoft opposed the Cryptography approach because it would shift control to the studio and away from hardware makers.