Since I was a wee tot, the received knowledge about electronic books is that they would never work and the rather startlingly functional traditional paper-based book would always be King.
However, while I think the Kindle is butt-ugly and I can't imagine getting one until at least 2.0, casual reviews like this and the experience of a friend with the thing, and my own experience reading blog posts and websites on my iPhone, have me believing we are seeing the beginning of the end for the book. Now, I doubt it will ever totally go away, as paper books are just too darned useful.
But in the same way I will never again buy a game in a box if I can avoid it, I think downloading books to a device is going to become the norm eventually, and I wouldn't have thought so just a few years ago.
In addition to the conveniences of buying any book you want any time you want, and not having to lug a bag of books on vacation, I once read an intriguing argument that those fervently favoring the "traditional" book were actually ignoring the fact that the book as we know it today is a very modern technological development.
Books have actually gone through many stages of development over the centuries, and the oh-so-convenient pocket paperback only came about in the last 50 years or so.
So books moving to digital devices would actually be just another expected step on the ladder of progress that has been occurring since Gutenberg had a bright idea...