OK, first off let me wholeheartedly agree with the OP about AM HD being an epic failure. A disaster. And, lastly, it's a fine litmus test to separate the clued-in (who have shut it down) from the clueless (who haven't).
Now, onto FM HD. I have more mixed feelings about this portion of the technology. It has/had potential to provide something interesting. However, in practice, it rarely delivers.
First of all, there are the well-documented peculiarities of how the digital signal will just dump out on you when less than perfect. If you're listening to an HD-2, that means you abruptly cut to silence. If you're on the HD-1, more often than not you notice a half-second difference between the HD and analog feeds. Very annoying.
However, worst of all is how the opportunity for owners to capitalize on HD has been squandered. Recently, I was in Salt Lake City - an area tailor-made for HD radio if ever there was one. Transmitters with awesome power and line of sight tower over the entire metro area, so the digital signal does a lot better than in most areas. Lots of stations, yet all are are at least 0.4 MHz spaced - so the nasty aftertaste of adjacent signals (be they rimshots or adjacent market signals) being blotted out is not present here. Technologically, HD works better here than anywhere else in the US. Yet, there is trouble in paradise.....
I've noticed that a number of stations that were supposed to add HD as long as 2 years ago still haven't done it (KENZ, KUBL, etc.). And, a couple of stations that used to have HD-2 signals as little as 10 months ago no longer offer them (KBEE, KBER, KSFI, etc.). Worst of all, those that do program HD-2's offer a mixed-bag of formats. My favorite waste of bandwidth involves a Classic Country format which is also offered over a Provo-area based analog translator on 99.1. This 'station' can be heard on THREE different stations' HD-2s: KISN 97.1 HD-2, KZMY 99.5 HD-2 and KNRS 105.7 HD-2! All three transmit from the same area with almost identical signal patterns! Talk about a waste, a good 1/3 of the HD-2 offerings in this market consist of the exact same thing. Some value there!
Of the rest, the best seems to be the classic alternative format ("Radio Radio") offered on KOSY-FM 106.5 HD-2. It's awesome! Aside from that, there's nothing else compelling offered via HD - which isn't that different from what you see in most markets. There used to be a 50s-60s-70s oldies format on 98.7 HD-2, but now KBEE no longer offers an HD-2 feed.
In other words, there just isn't enough value offered to the average listener for them to bother with HD. At least satellite radio offers a ton of format options which seem to justify the price of entry to many consumers. HD really doesn't. And therein lies the problem. It's not just the technology, it's what station owners have (and haven't) done with it. There's no reason for the average consumer to go out and buy an HD radio. The "added value" just doesn't equate to the cost/trouble of purchasing a new HD radio.
So, is FM-HD a failure too? Well, based on the lackluster offerings and absolute lack of interest shown by consumers, you could say that it is. However, it doesn't have to be. Unlike AM HD, it has potential. But, breathtakingly poor management of this new aspect of the medium has definitely stunted its growth so far. We shall see how it goes, but at this rate it will never take off. Why? Because it's a 2010 answer to a 1990's question. Technology moved past this point about 10 years ago. Sure, there's nothing to say that the few of us with HD radios won't get to use them for a long time. But I am having serious doubts that HD radio will ever be relevant. For that to change, 'lightning' will have to strike and strike soon. So far, there's no evidence of that in the forecast......
