If VHD had been released in American in 1982 as orignally planned, there is no question, in terms of features and quality, it would have beat both CED and LaserDisc. Of course, I'm referring to the quality of LD at that time - as compared to late-era LD, VHD would lose. But back in 1982, it was a big winner. How was VHD better?
PICTURE QUALITY - While VHD had only 250 lines of horizontal resolution and about 70 lines of chroma resolution, it still had a very sharp picture with no drop-outs or visual anomalies. Unlike an Extended Play LD, VHD can never suffer from crosstalk. While both CED and VHD are stylus-based capacitance disc systems, a CED image is always slightly pasty and filled with numerous drop-outs. Not so with VHD. Both systems also employ a 'buried subcarrier' for chroma encoding, which on CED, results in a 'thready' look to vertical transitions (due to the placement of the chroma within the luminance and the comb-filter used). In comparison, the VHD image is smooth and clear with minimal dot-crawl. JVC somehow managed to produce discs that are free of visual artifacts. VHD dosen't skip like CED either - like LD, a VHD disc must be either clearly defective or scratched for it to skip.
Sound Quality - Again, VHD is head-and-shoulders above both CED and analog LD. From the beginning, JVC included a noise reduction system for VHD audio. As a result, even mono discs are noise free - there's no ticks or pops to be heard. Even visual disturbances on screen do not cause audible artifacts (unlike CED or analog LD). And due to the frequencies used to encode the FM audio signals, there is no high end "splatter" or problems dealing with high-level, high frequency sounds like LD.
Special Effects - In comparison to CLV LD, VHD is clearly the winner. VHD can do crystal-clear slow motion, fast-forward and reverse and can quickly (within 4 seconds) search to any of the 54,000 tracks on one side of the disc. It can also do time and chapter searches. VHD is also capable of freeze frame and normal speed reverse play. As compared to CED, VHD wins every time. CED's seek times are slow, and effects quality is poor. CED also never offered any form of slow motion or reverse play.
Durability - LD wins here, but VHD is a close second. The VHD discs are protected in a tough plastic caddy, like CED, but unlike CED, the discs have no grooves to damage. Since the VHD stylus tracks with 1/10th the surface pressure of CED, a VHD disc will last for over 10,000 plays and the stylus for over 2,000 hours. CED can't come close to this type of performance.