Both camps have talked about changes that would let them coexist on the same network, but not interoperate to the extent that an IEEE 1901 device could link to an ITU G.hn box.
The fight is over which spec the companies manufacturing chips that create the physical links for the powerline NICs will support.
Intel and a range of telecommunications carriers support G.hn, as does the BPL-focused HomeGrid Forum, though the focus on BPL reduces the impact on powerline LANs.
HomePlug AV (HPAV) seems to have won de facto status in the U.S., according to PCWorld, though vendors such as NetGear, which introduced a line of combined powerline/WiFi routers at CES, add proprietary tweaks to increase the speed closer to IEEE 1901 standards.
I've been following powerline networking since I got the nickname "Toaster Boy" for breaking this story about Novell's early plans to make BPL an important part of its plan to take over the world with NetWare.
For the record, Novell never built a networked toaster (it was a coffee maker) and never took over the world with either powerline nor NetWare.
Powerline itself, though, is good stuff. It isn't clean or reliable enough for anything more than small offices.
I expect, within another product generation, powerline will become the standard way for people to create wired networks inside houses and small businesses in situations where they need more reliability or security than WiFi but don't want to go to the trouble of running Ethernet everywhere they plan to set down a laptop, printer or TV for more than a few minutes.
The standards war is pretty low key right now; if it escalates, or ends up in a market split between two incompatible standards, both sides will lose.
The whole advantage of powerline is you just plug it in and go. It's very consumer-friendly.
Make normal people figure out the difference between 1901, G.hn, BPL, HPAV or something else, and the whole thing will just short out and be replaced with something less annoying.