Vibrationally state-resolved differential cross sections (DCS) and product rotational distributions have been measured for the Cl+HD(v=1, J=1)--> HCl(DCl)+D(H) reaction at a mean collision energy of 0.065 eV using a photoinitiated reaction ("photoloc") technique. The effect of HD reagent rotational alignment in the Cl+HD(v=1, J=2) reaction has also been investigated. The experimental results have been compared with exact quantum mechanical and quasiclassical trajectory calculations performed on the G3 potential energy surface of Allison [J. Phys. Chem. 100, 13575 (1996)]. The experimental measurements reveal that the products are predominantly backward and sideways scattered for HCl(v'=0) and HCl(v'=1), with no forward scattering at the collision energies studied, in quantitative agreement with theoretical predictions. The experimental product rotational distribution for HCl(v'=1) also shows excellent agreement with quantum-mechanical calculations, but the measured DCl+H to HCl+D branching ratio is near unity, which is at variance with the theoretical calculations that predict about 3 times larger yield of HCl+D at these collision energies. The reactivity shows a marked dependence on the direction of the HD(v=1, J=2) rotational angular momentum, and experimental measurements of this reagent alignment effect are in good agreement with theoretical predictions.