When I was in college I would buy from Amazon and a local place - the local place for used cds. I would get about 2 a month or so.
Now I get about 2 or 3 a month (on average) from Amazon.
I have tons of mp3s - but for the most part, I'd rather have the cd.
were I a college student, maybe I'd do all the mp3 thing, but I really don't care that much and just like the cds.
same thing with software - in college when I couldn't afford it, I would get everything off the net.
now I can afford it, so I just buy it. that said - I didn't buy XP Pro, but then I stopped using that anyway once I saw that Home had everything I needed and used less ram anyway.
I guess everyone feels their own way about it - I still get mp3s every now and then - usually for things that I don't want a whole cd for (Stevie Wonder's "Superstition" comes to mind).
But if I like the band - Queens of the Stone Age, Foo Fighters, etc - then I will pick up the cd in a store or at Amazon depending on where I am (I used to do like $10K a year of online stuff delivered to me, now I do far less b/c I can't get stuff delivered to my apartment and my new work doesn't like packages... grrr)