All Blu-Ray Players sold after 31/10/07 must accord with the new Profile 1.1,so one would need to verify that a potential purchase is not obsolete stock.
Both Blu-Ray,and HD,DVD Players will play SD DVDs,but whether it would be to the same quality as a high quality standard DVD Player is debateable.
HD DVD Players have tended to be substantially cheaper than Blu-Ray ones.
Upto now combination HD/Blu-Ray Players have given poor quality results,and have not provided all the facilities that are written into the format's protocols.
Another factor to consider is the library/interest level of films released on the competing formats,ie do you just want "blockbusters".
It is my understanding that more independent(small) Companies have subscribed to the HD DVD format.
I personally have bought a Toshiba XE1 HD DVD Player because of it's excellent quality/price ,and Toshiba's ongoing support by way of software updates.
Whether or not you would see the difference between SD and HD on a 40" screen you would have to decide for yourself,but if you can then why deny an HD panel the opportunity to display HD content.