Yes Blu-Rays can play any stardard dvds, CDs, and blu-ray dvds. Blu-Ray is 5 times superior in terms of picture quality than a stardard dvd. Standard dvds have a resolution of only 480p but blu-ray dvds have a resolution of up to 1080p or high definition. Blu-Ray can store up to 50GB on a dual layer disc compared to only 8.5 GB on a stardard dvd disc. The only requirement for a blu-ray dvd player is that you will need a HDTV television of at least 40 inches with a 1080p resolution to truly see the picture quality and be amaze.
Blu-Ray is still technically new. Dvd blu-ray movies generally cost around $30 while standard dvds cost around $15 for new releases. Blu-Ray dvd players cost around $300.00 and above but during the holidays you can find some for around $250.00. It will be awhile before everyone will be switching to Blu-Ray.
Yes a Blu-ray player can play regular DVDs, The blue laser beam is designed to read the same information just as a Blu-ray disc and as far as picture quality, their will be a slight difference in the image a little more cleaner I should say, the better High Def television I'm sure the sharper and crisp the picture will be from regular DVD. So go on and dust those disc up and enjoy the show and when you get tired of movies, pop in a CD, it'll play those also.
Blu-ray and HD DVD players upconvert and play normal DVDs. In general, HD DVD players are the better upconverters.
I have an HD DVD player (HD-A2) and while it is a slightly inferior upconverting player to my Oppo 971, I still use it to play DVDs on my 720p projector, and the picture is pretty darn good on my 110" screen. Not quite as sharp as HD DVD disks ... but close. I suspect it wouldn't be as close if I had a 1080p projector.