I agree completely with what Scott said. Over the last year I've phased out paper books almost entirely. Some books I was half-tempted to buy in paper format weren't bought because reading a paper book is now an honest-to-goodness inconvenience
for me. It helps, though, that most of those titles have since been released as ebooks (like Scott, I'm also a loyal PDM customer), bought, and read by me.
There are still a handful of authors that i'll buy in paper format. as far as i know, their books aren't being published electronically because of their publishers' wishes, not theirs (sandra cisneros and milan kundera come to mind), but that's not going to stop me from reading their work.
i think enough people are moving towards reading electronically, and in turn they're feeling like having to carry around an actual paper volume is a huge hassle. the demand for ebooks is going to keep growing, whether microsoft gets their DRM stuff taken care of or not.
On a related note, has anyone even bothered to try and get around PDM's encryption/DRM/etc? i'm quite fond of the current method of registering books, and i'd hate to see it get ruined because of a security flaw.