I joined the HD crowd about 2 years ago with a 55" Sony Bravia LCD TV, and the difference between DVDs and Blu-Rays is VERY noticeable. If you play it on a smaller screen, however, the difference is not noticeable.
Much depends on the size of the TV screen you have.
BTW, I have about 500 movies in my Windows Media PC collection now, hooked up behind the main living room TV (the 55" Sony) and about 60 of those are Blu-Ray. When it comes to movies like Star Trek, Transformers, GI Joe, and even Avatar, the extra crispness of the picture when using Blu-Ray is very much appreciated. It is so crisp that I think the whole fad towards 3D technology is a waste of time. When the 2D images are that perfect, they almost seem to pop out of the screen already.
I hate the 3D glasses. I tried them at home with the movie Coraline and will never do it again. When a game or movie has both 2D and 3D versions, I go for the 2D.
I'm really hoping the 3D thing is a temporary fad, but it probably won't be.