I'm still buying CDs...
One other point they are missing entirely is that the world is now a global marketplace. In the country where I currently reside - South Africa - there is no legal way of purchasing music online. iTunes and Amazon MP3 for instance refuse to sell locally, citing licensing restrictions.
I am increasingly turning to Last.fm to discover new music, sample it there or via P2P, and buy the (DRM-free) CD online if I like it. I get cool interactivity, maximum quality, and a physical object in the end. Mostly clean conscience too although the file sharing step is obviously illegal