OMG TOO COMPLICATED FOR THE AVERAGE CONSUMER
Of course it does, to you, me, or any modern gamer or technophile who gets turned on by higher pixel count. It matters to your average electronics store, who was pushing HDTV's like crazy this holiday season. Heck, local news here in the Midwest states was like watching an advertisement for HD as people from Target "informed" us about the next generation of television for low, low prices. They even finished it off with some misinformation icing: That analog TV signals will be cut off in 2009. This is true, but that only means you need a digital cable box, not an HDTV.
But what about the average person who doesn't wake up in the morning to check Destructoid or Gizmodo? Honestly, I think this is all beyond them. There are two cases I can recall this holiday season that make me think the road to total HD domination will be a long and rough one.
Case 1: I was in a Best Buy with Christmas money in hand to buy a copy of Civ IV Gold (old yes, but I didn't have it yet, so whatever.) There was for some reason only one register open in the entire store, so I got stuck waiting in a long line. Behind me was a guy hefting a small 19 inch 720p tv. Trying to make conversation and act like I wasn't a complete sociophobe, I decided to ask him what he was going to do with it. He told me he was putting it in a bedroom. Not what I meant.
I decided to try to make it clearer: "Are you going to be watching movies on it with BluRay or HD-DVD? Maybe you're going to play your 360 or PS3 on it? Maybe upgrade your cable package and just watch television with dazzling detail?" Nope. He was just going to watch standard def cable on an HD TV. He probably won't even be bothered by the fact that his picture looks like blurry shit.
Case 2: My grandma was over for the holidays. She's a nice lady, but when this happens I have to put up with her and my mother discussing politics and technology with horribly misinformed points of view. So, one time she and I were watching the local news and she asked me to explain the whole HD thing to her (yet another HD newsvertisement was on). Well, the fact that you need to pay more for HD channels was as far as I was able to get. She absolutely refused to even attempt to process ANYTHING that had to do with the technical side of the subject, and I wasn't even going that technical (720p was less expensive, but less detail. 1080p was more expensive, but more detail. That's IT!) She gives me this line that she's to old to learn anything different i.e. she doesn't care enough to bother.
I dunno, maybe I live in the wrong town and associate with the wrong people. But while I applaud all these businesses' push to move everyone to HD, looks like we're going to have to wait for an iPodesque stroke of genius to dumb down this thing to the level dumb people will understand.
Luckily we got fiber service in the area, so we get HD on FiOS, so I got all HD'd up in the course of a weekend.
-Everything connects via HDMI, even audio-only connections.
-1080p becomes standard on TVs 40" and above.
-Home audio system become smart enough to auto-select the proper inputs.
Honestly, I can't blame old people for not caring. I don't care about all sorts of stuff that is probably drastically important to high school kids. They'd rather watch 480i than not be able to figure out how to turn the damn thing on.
At 19" that guy probably wouldn't notice much either to be honest. Look up the distances required to see the difference between 480i and 480p and 720p. For 19" it's gonna be inches away to see the detail of 720p. Hell, my TV is 1080p, but I have to sit within 4 feet to see all of those pixels.
Back to your original question. HD does make a difference. The colors are better, the picture is more clear (unless there are compression artifacts), and the details are nicer. I find myself avoiding standard definition altogether on my TV. Yes, I'm a technology geek, but my dad and mom have HD cable and a new HD TV and they do the same thing. And, they hardly know what makes HD, HD. They just know that the picture is more clear on the HD channel and so they watch that instead of the same channel on SD.
Oh and BTW, I get my local channels in HD either through my TV antenna or through cable. I have the 22 channel cable package and they're still on there in all of their HD glory. So you don't have to pay more to get HD stuff. You just need the HD tuner built into the TV. Look for QAM/ATSC tuners in your TV set. Anymore I'm pretty sure anything sold as a "TV" has to have at least an ATSC tuner.
I will be old, and I will act like that. SHIT
Does HD matter yet? To some people. For those that actually understand the concept, yeah, they'll probably want to get an HDTV, but MANY people just don't care about how many pixels there is on the TV or how sharp is so they'd rather save money as opposed to dish out thousands of dollars on a HDTV that they don't even care about or what it offers to them.