It appears the major sticking point concerns the depth of the memory layer on which data is written: HD-DVD favors a data layer 0.6mm beneath the surface of the disk, the same depth as on the current generation of DVDs.
Dual-shot adds a second layer of colored, transparent or translucent polycarbonate on top of a base layer to produce secondary color blends and depth effects.
This is made possible by the fact that Blu-ray uses a 405nm laser to read its 0.1mm deep info layer, while HD DVD uses the same blue laser wavelength at the depth of 0.6mm.