Well,
I started this thread many moons ago...I finally purchased an LD player (Pioneer CLD-703) fed into a HT receiver equipped with a decent video processor (ABT2010 or DVDO Edge) and have done numerous comparisons. My findings include:
With the right player and video processor you can get a lot of mileage out of LD, it's expensive but you'd be surprised. The differences in LD players and the quality associated with picture is staggering. One LD player could destroy another in picture quality. Still my setup allows for newer titles to have similar picture quality to NON-Anamorphic DVD's. Empire Strikes back on DVD looks MUCH better then the LD counter part.
The Audio however is an entirely different story. LD DESTROYS DVD with regards to audio on every title I've tried. In fact the THX certified Top Gun LD is only a bit behind the Lossless Blu Ray. Having listened to Empire Strikes Back on PCM and done direct side by side comparisons to the DVD I simply can't listen to the DVD. It sounds like poorly recorded MP3's at high volume. The LD crushes it, allowing the user to 'crank' the volume and have no concerns about hardness or compression.
It's been a fun experiment. It's opened up my eyes (and ears) as to how easily the end consumer can be fooled into thinking newer is almost certainly better. With regards to audio we took a big step backward with DVD. Picture is certainly better on the smaller disc but if you're into audio like I am I can live with LD until BD versions of my favorite films come out (Star Wars, Apocalypse Now, some non existent James Bond films, True Lies among others).