I think they decided on JPEG 2000 for copyright issues, but I'm not for sure. I also don't think your going to find hardly any consumer hardware that would use it either. So Commercial Digital Cinema use's something different. Also the digital signal is encrypted all the way to the projector, and the projectors all have fail-safes built in to prevent anybody from copying. And all the projectors are monitored from Dolby labs.

As far as the quality between MPEG, AVCHD, and JPEG 2000 is concerned, I don't know. I would have to see A B tests between the 3.