They're using HD-DVD's I think. Both Blu-ray discs and HD-DVD's are made the same way, its just that they hold more memory. Its just like with blank cd's. A 70 minute blank cd is going to be cheaper than a double sided one. Which reminds me, I think Blu-ray's might have two sides, or maybe that was the HD's, or both...
Either way, I think it just has to do with the amount of data that's capably of being stored on the disc that raises the price. I think its a pretty standard price change, and in all honesty, its not even that big a deal. It's just $10, and prices will go down anyway. What I'm more concerned about are the price tags on the systems themselves.