OLED is already creating competition before it comes to the market. While Sony definitely might be the first with their XEL-1, Toshiba has announced plans to ship an organic electroluminescence (EL) display in 2009. Their size will be larger, at 30 inches as compared to Sony's 27 inches. Toshiba also claims that eventually OLED will take over LCD as manufacturing costs are lesser. I'm sure they also hope HD-DVD will take over Blu-ray but that is another story.
OLED screens offer higher contrast and faster response times than LCD (liquid crystal display) screens. OLED screens can also be thinner since no backlight is required. The carbon-based materials used to make OLEDs illuminate themselves when an electrical current is applied.
However, OLEDs are difficult to manufacture and degrade over time. Manufacturers are therefore working on ways to improve production yields and increase the lifespan of the screens.
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