I am the only person I know with a Blu-ray player (let alone the only person with three). When people ask me (with a tired look in their eyes) if they need to replace all their dvds, I tell them it's not worth it. The increased picture quality and sound is nice, but not necessary for every film (although some like the recent Lord of the Rings trilogy Blu-Ray? Absolutely necessary.)
That said Warners has made it really easy if you want to upgrade some of your existing titles. They started a program at dvd2blu.com where you can send back your dvd for the upgraded Blu-ray for about 5 bucks. It's such a good deal I might send some I wasn't even planning on upgrading.