The Nihon Keizai Shimbun newspaper quotes a Toshiba Exec saying that the unification process of Sony's Blu-Ray and Toshiba's HD DVD is 'difficult'.
Apparently Toshiba would make concessions if Sony can proof their next-generation DVD format is better. Toshiba says so far Sony could not convince them. Hollywood studios might have to get involved to settle the issue. Lets hope for the best.
More details on Nikkei.Net (Subscription).
Toshiba just showed off a 45GB HD DVD. The negotiations between Sony and Toshiba started in April.