While Toshiba lost the format war, they aren't giving up on the consumer electronics market. In a recent interview with the Wall Street Journal, Toshiba Chief Executive, Atsutoshi Nishida, stated that the company plans to work on bringing content from the PC to the television and focus on "upconverting" DVD players.
"What people don't realize is that Hollywood studios are going to release new titles not just for Blu-ray but for standard DVDs as well, and there are a far greater number of current-generation DVD players out there. If you watch standard DVDs on our players, the images are of very high quality because they include an "upconverting" feature. And we're going to improve this even more, so that consumers won't be able to tell the difference from HD DVD images. The players would be much cheaper than Blu-ray players too. Next-generation DVD players are in a much weaker position than when standard DVD players were first introduced."
Toshiba's HD DVD players were very good at upconverting standard DVD's. It will be interesting to see if they can improve the image quality to deliver near HD DVD quality on their DVD players. If you'd like to read more, the entire interview can be found here.