Count me as a happy fan of the first DVD set--and someone who's eager to buy the entire series... It's already a huge improvement over the VHS set, and considerably cheaper to boot...
Sure the extras on set one are slim--they've got to spread them out over 25 (or however many) sets, and there's not a lot of material to choose from which hasn't already been released on the Special Edition DVD...
As for the quality--I don't have an HDTV, but if I did, I'd fully expect them to be much worse than on a standard set. None of the current generation of HDTVs do a good job of dealing with poor source material--it's also a big issue with weaker satellite connections. Better DVD encoding would help, but it's not the sole cause of the quality degradation, much of it has to do with how it's converted to the HDTV screen. The discs look beautiful on most standard TVs, and perfectly decent (to me) on my computer's DVD-rom--which has a much higher resolution than HDTV...
Given the huge number of episodes/sets that will be forthcoming, I (for one) would not want to see them spreading out their 40-episode packs over a larger number of discs--not for the marginal quality increase that would result, given these original materials...
I agree that we're not being treated to some deluxe presentation. Other than the nice menu, it's pretty basic. Then again, this is MPI we're dealing with, not BBC or Warner. I would love improvements, but I'm pretty darn happy with what we've got.