I have a 37" HD TV, and as I've been upgrading some of my DVDs to Blu, (or bought combo sets), I've been able to compare and contrast, and the difference between HD and SD is immense even at 37". Full disclosure... I had laser vision correction four years ago and have better than 20-20 vision.
I'd go with Blu-ray every time, except when there's an incorrect frame rate (UK Life on Mars was shot in 50Hz Native PAL, and went to 60Hz 1080i with pitch slowdown on Blu) or the Blu-ray is upscaled from an SD source and it looks worse than upscaling a DVD of the same content (1st release of Samurai Champloo from Funimation, 1st attempt at releasing Escape from New York on Blu, and especially the Trials and Tribbleations bonus episode on the Star Trek TOS discs).
But nearly every Blu that I have blows the equivalent DVD away. Even if it is an upscale of an SD source, all things being equal, you might get the same overall image, but there will be less in the way of visible compression, native progressive 24fps playback, better colour definition, and of course, lossless audio. Being in the UK, the advantage of getting everything in the native frame rate at 24fps as opposed to 25fps 50Hz PAL with 4% speedup, chipmunked or pitch-corrected audio is impossible to overstate.
The irony is, I hate the Blu-ray format. That java crap that they author each disc with is a pain in the arse. Each disc takes longer to load than a DVD, and the players have less functionality. No slow-mo rewind. Only a few discs hold their place in player memory, and the picture in picture options on Blu-rays which require secondary audio only work if you disable lossless audio in your player. This isn't a limitation in technology. It's part of the f***ing Blu-ray design spec. It's supposed to be that way. Twonks!