Hard disc-based systems are great for convenience - I wouldn't go back to MiniDisc or a Disman now that I have my iPod Mini. But like Julian, I much prefer to be able to buy a CD and either listen to it in my CDP or rip it down (to AAC in my case) for use with the iPod. In fact, just for background listening, I often just use iTunes and my library on the PC, even though my HiFi is right next to me and the PC is connected to it.
I sort of remember when vinyl disappeard - I lived in Hong Kong in the late 80s, so many people were either moving to CD or used cassette (in my case) - you could hardly get vinyl. The same happened over there in about 1992/3 for cassette. In fact, I was quite suprised when I came back to live in the UK in 1998 that albums still got released on cassette. When I got my first CDP in 1991, I never even thought of ever owning a turntable. 11 years later, that changed. A Saturday afternoon hunting through record shops selling old vinyl can be very enjoyable.
The issue of reliablity also has to be considered - in fact, I'm about to buy a second hard drive with a USB 2.0 enclosure to use as a backup drive for all my photos/music. Not totally fool-proof, but if the drive is only used for backups, then it's a reasonoble level of protection.
Plus, if I shell out £16.99 for an album or movie, I actually want something to show for it - i.e. a DVD or CD, not just a bunch of files made up from 0s and 1s.