You'd think that HMDs would change and get cheaper, even if they're not completely mainstream. Remember IO glasses? They're still around, and I don't think the price has dropped. My belief is that QVGA (320x240) is OK for a quick reference monocle design. VGA is the bare minimum for a useful one, and SVGA (800x600) is frankly the required minimum for people to accept a technology. XGA (1024x768) is the right resolution. People expect to achieve such resolution from their main monitors, after all.
If you look at two big HMD online stores, TekGear and VR Realities you'll see a lot of expensive hardware. Some of which has NOT been updated in YEARS. Disappointing, isn't it?
So, what have I found in my own searches recently? Well, 320x240 monochrome NTSC video monocles are cheap and easy to get. Some people are trying OLED HMDs, but they're just as expensive as the older Active Matrix LCDs. That example WAS under $1000, I wonder what happened to cause the price increase?
My personal bet for inexpensive high resolution HMDs come from the DLP and LCOS industries. Both technologies reflect light towards the display instead of blocking it like normal LCDs. DLP uses MEMS moving micromirrors. LCOS uses newer (cheaper?) specially processed silicon. The products from Headplay currently wins in terms of resolution for the price, plus it has oodles of inputs.
One thing I've noticed is how annoying these can be. Many are designed for total immersion. I don't always want that. I think Icuiti is on the right path for "mobile useable display".
Actually, what I'd love to have is a transparent (or Augmented Reality) display that can use my glasses for a screen and put up a simple monochrome image for me. A GPS map would be nice for instance. I'm not wanting a complete overlay, just a portable heads up display. Some systems are made almost like that, but I'm not willing to pay $200 for it, let alone $2000.
HMDs have one issue that's hard to measure. Comfort. Are they comfortable to wear? Am I going to want a bottle of excedrin sitting next to me after I use them for 15 minutes? Once the price comes down that people are willing to pay and you can get enough volume to get a few in stores, this will be a hard question to answer.