I'm feeling long-winded again!
Most everybody knows how awful early Blu-ray titles like Daggers and Fifth Element looked. (The latter was so bad that they are already re-releasing it.) But they weren't 50 GB discs, so it's not the fairest comparison.
What I can say without hesitation is that the 30 GB HD DVDs of King Kong and the Matrix series didn't just look better than such 50 GB Blu-ray discs as Click and Talladega Nights, they looked MUCH better.
And while comparing comedies to action flicks is obviously tricky, what I'm saying is that the full capacity of those 50GB films didn't help them one bit. I see no difference between the 25GB version of Talladega Nights that came free with my PS3 and the 50GB special edition that I got from Amazon. Technically, you would expect the 50GB copy to look twice as good because of the additional breathing room--and it just doesn't.
Some of the best looking Blu-ray discs on the market are 25GB--Corpse Bride, Planet Earth: The Complete Series, Open Season, etc. Some of the worst looking discs are 50GB--The Sentinel, Talladega Nights.
What matters is
not the space, but how it is used. If a Blu-ray MPEG-2 encoded file takes up more space, then you are going to need a bigger disc to hold it--but that doesn't mean that the encode on the bigger disc is going to look better than the VC-1 on HD DVD. Sometimes one of the benefits of a technically superior codec is the more compact file size. In music terms, WAV files are bigger and require more room on your iPod--does that make them better than MP3 or AAC files that could fit the same amount of music in a smaller amount of space?
Ten pounds of marshmallows and ten pounds of iron both weigh the same, but one takes up a lot less space than the other.
Paramount tends to use the space-hungry MPEG-2 encode on their Blu-rays and VC-1 on their HD DVDs. Dual format releases like World Trade Center, Flags of Our Fathers, M:I:III and Happy Feet (Warner) are virtually identical visually yet differ in the amount of disc space occupied.