Despite what Hollywood wants you to think, DVD isn't going anywhere any time soon. Blu-ray sales are still a drop in the bucket in comparison.
That being said, if you already have a BD player, I'd buy movies on Blu-ray. As Dartman pointed out, prices of new releases are a bit high, but if you wait a bit, most titles can be picked up for $20 or less. I've been picking up a lot of older titles that I don't have on DVD at places like Target for $10-$15.
"Blu-ray is just a bag of hurt." - Steve Jobs