<3 it.
If you didn't buy the dock on the release date, you could've found out that the Zune HD sync dock for about $50 also has the hdmi and av out, which saves you $50... and then you would just go buy a cheap hdmi cable.
SD content looks like SD content. There's no improving it unless maybe it gets upscalled through hdmi output (there's no written proof that the Zune HD is even supposed to upscale), but I don't have a dock to test it with.
Not really sure about the digital copy problem, but I would've either purchased it knowing that, "oh well, I did my homework and apparently it's not supported," or, "well it's okay, maybe a firmware update will add it to the types of supported media."
In regards to apps, I'll reference what I said to you about 20 min. ago:
"Surely you knew that there were only 8 games and 2 utility apps available before the launch date.. it's not like MS was going to suddenly reveal a catalog of thousands of apps (which of course we all dreamed of) and there was plenty of speculation about if there would or wouldn't be an app store at start-up, which should've told you that you'd be taking a risk if you wanted tons of apps from the get-go.
Look at the WinMO app store, as far as I know there's only a few hundred in there. You have to remember that the Zune has the Tegra chip, which phones may use in the future, so it's a lot easier to come up with hundreds of apps for WinMo 6.5 then it is for the Zune."
You know you're going to have to wait for November, so just wait or feel like you screwed yourself by trying to sell your HD on craiglist and take a big loss on an amazing device.