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I'm saying it badly. The actual particles of silver halide are too small to be seen. They clump together to form individual grains. The grains are small enough (10-30 um) that you can fit about 1000-4000 in an inch of film, but they're not lined up neatly. Instead, there are clumps dispersed through the emulsion. A smoother dispersion makes for a smoother looking, or less grainy film. But it's ultimately the particles and grains that hold information. More of them can hold more information, so the grain clumps hold more detail than the less clumpy spots. Another way to think of it is that those spots have more contrast.

Color "grains" are a lot larger. I forget the size. But they also work a bit differently, so it's not quite right to just compare sizes. BD also has a larger color palette than DVD, which is also important and cool to me.

Because these areas have different contrast, or different amounts of picture information, you can only smooth it out by removing detail from the clumps or by faking detail in the lighter areas. It's nothing that hasn't been said before, I just prefer to talk & think in a more technical way. If you eliminate the grainy look, you lose part of the picture. No way around that. However, HD at 1920x1080 can't always match the resolution of even old 35mm B&W film. (It can do 35mm color, though). 35mm is 1.4" or between 1400-5600 pixels, so some smoothing is possible with some films without any loss on BD. The situation with 70mm film is obviously worse. To rephrase what pulp novelties says, if you take a picture of a picture, the grains don't match up, and you end up "smoothing", which is just another way of saying you lose contrast or detail. If you digitally sample, you get something similar.

When I try to put this all together (my head hurts, but also) there's clearly room in a lot of films to trade off several competing issues. Given what most people want, and the fact that lossy MP3 is so popular, it's great that companies like Criterion exist that cater to those of us that care about the detail, because the mass market--and many people here--are pushing for things to go the other way.

BTW, I don't know about graininess in color film. The way it works, I just can't get my head around it. But changing the gamma seems to be a legitimate solution to enhancing contrast in a faded print. That, of course, also increases the contrast of the grainy look. Perhaps there are other reasons to do it. But I can also see how gamma would generate a lot of difference of opinion among people that use different display technologies.