Early into 2008, the seemingly interminable duel between HD DVD and Blu-ray officially ended when Toshiba waved the white flag and declared it would stop producing HD DVD players. Shortly thereafter, the studios still backing HD DVD withdrew their support and said they would get behind Blu-ray.

But while Blu-ray won the battle, it hasn't yet won the war. The growing popularity of digital downloads, combined with the relatively high prices of Blu-ray players and discs vs. inexpensive, so-called upconverting DVD players, kept many consumers away. And so far, Blu-ray adoption has been relatively low.

As the next-generation format war finally wound down, however, other battles were brewing apace. Apple unleashed its iPhone 3G in July to great fanfare, with at least three high-profile competitors--T-Mobile's G1 Android phone, RIM's BlackBerry Storm, and Nokia's upcoming N97--immediately cast as possible "iPhone killers."

Credit: James Martin/CNET News

As the iPhone 3G went on sale in July, a crowd was eagerly waiting outside
the downtown San Francisco Apple store.

Also battling it out for market dominance were makers of Netbooks, the one product boosting the PC industry's fortunes amid inclement conditions. Given this year's economic downturn, it made sense that the smaller, cheaper PCs would grab consumers' attention, and PC makers paid heed. At times it seemed that every week brought news of yet another company getting in on the mini-notebook trend.

The economic downturn loomed large in corners of the gadget world beyond the PC market, however, with layoffs hitting gadget and game makers including Sony, TiVo, Electronic Arts, and Motorola.

Among consumer electronics retailers hit hard was Circuit City, which filed for bankruptcy protection after a series of poor earnings reports, and after entertaining a $1 billion buyout bid from Blockbuster. To some consumers' delight, the chain's bankruptcy has meant liquidation sales at closing stores, but not necessarily the big-ticket-item discounts some had hoped for.

Consumers did enjoy sizable bargains on HDTVs, which so far appear to be avoiding a recession-related hit. In North America, shipments are still increasing 17 percent year over year, according to DisplaySearch data.

Those hunting for MP3 players also got nice price cuts on Microsoft's flash-based Zunes.

Camera buffs welcomed the arrival of four higher-end SLRs that considerably expanded the market for "full frame" cameras equipped with relatively large sensors the size of a frame of 35mm film. First was Nikon's 12.1-megapixel D700, Nikon's attempt to offer a lower-price option to the D3. Second was Sony's Alpha A900, with an as-yet unmatched 24.6 megapixels. Third was Canon's 5D Mark II, a 21.1-megapixel sequel to the acclaimed but elderly 5D. Last and still not publicly available is Nikon's $8,000, 24.5-megapixel D3X, which will take on Canon's 1Ds Mark III.

And take this one as good or bad news, depending on your perspective: 2008 proved to be yet another banner year for the indomitable force known as Hello Kitty gadgets.