Alright, here is where I give a little rant against PC World. I totally do not think that JPEG will be replaced anytime soon. It's a laugh. Let me get this straight first: I am not bashing Microsoft. I simply find it hilarious that PC World thinks that Microsoft will be able to convince everyone to use their new HD Photo format in place of the dominant photo format, JPEG.
OK, let's say we were to give them the benefit of the doubt for now. As the article states, it's a high quality image format, likely to rival JPEG. It provides good compression ratios, and JPEG is 15 years old. Everything seems against JPEG. Or are they?
Well, Microsoft definitely looks like they want their new format to become the new photo standard for imaging. After all, they've been making deals with Adobe to provide a plugin for Photoshop that would allow exporting images to this format, and Microsoft's providing full support for HD Photo in both Windows Vista and XP. However nice and all that is, Microsoft just can't control the web, which is what actually runs the JPEG format. It's what all the web browsers support, and have supported, for a long time. It's what all the digital cameras support. Everything supports it.
I'm not saying that JPEG can't or won't ever be replaced, but when it does get replaced, it's going to take a long time. Just take a look at several other types of file formats that have been around for a while, yet have had many better types of formats come after them and survived: MP3. It's the standard. Sure, I know there are all sorts of other popular alternatives, such as AAC and WMV. The fact of the matter though, is that these formats aren't popular because of their superior quality over MP3. It's because they offer something that MP3 doesn't: Digital Rights Management.
Anyway, back to the point. I'm sure Microsoft has done a wonderful job creating a new photo format that will preserve quality nicely. However, don't expect it change anything (at least on the internet) for at least a decade.