A Blu Ray DVD will make even older regular DVD's look better.!! (It's not just for HD DVD's..) I believe you can even play music CD's on it, but I haven't tried it yet..
To some extent the pic will be clearer. If you are currently getting a good quality pic thru your dvd you should probably skip the blu ray. If possible, and you have a friend that has blu ray, have them bring it over and check for yourself.