Firingsquad took a look at the difference in image quality between the HD DVD version of Transformers and upsampled DVD.
Transformers is distributed by Paramount. This means that the movie is only offered in HD DVD and conventional DVD. The HD DVD is encoded using AVC which provides a superb image. There are no glaring artifacts or encoding errors that I could appreciate on my first viewing. As a film shot on Super35 with Kodak VISION2 500T 5218 stock, some of the evening shots have considerable grain (think ISO 500 film). Still, the HD DVD encoding captures essentially all of the detail of the 2K digital intermediate and we applaud Paramount for bringing a HD DVD digital transfer that is as authentic to the original master as is possible. The warm hues and crisp image come across beautifully on a 1080p display.
Check it out at Firingsquad. Here's a screenshot of the movie which clearly shows the difference between DVD and HD DVD:
The HD DVD version is much sharper and has better colors.