Wow this thread really took off! Lots of interesting view points, I'm really liking mobileread
For one thing everyone is well read and articulate thanks to the main subject of the site and unlike forums of other topics threads don't turn into huge arguments but rather intellectual debate.
I definitely can appreciate the old leather bound books that are as much a physical work of art as the story they contain. I'm an electronic tech by trade and always worry about how dependent we are on electronics, one commenter mentioned that ebooks last forever but from my findings that is not really true and a physical book would probably out last it. A friend of mine likes "apocalypse proof" stuff, vacuum tube based stuff etc because it really is possible that a large solar flare could knock out most if not all of our convenient gadgets.
I think there should always be hard copy backups of any literature kept somewhere. For personal use I don't have any elaborate or fancy books so my paper library is probably going to get pared down substantially. As most have pointed out it's not a one or the other situation.
I don't think my sister will come around very soon, I think its the technology that scares her off more than anything. She's not too computer savvy. As pointed out previously by one commenter E-readers are still in their infancy and I think with the new screen technologies coming out (mirasol, Pixel-Qi etc) they're going to get better and better and do more and more. As much as I like my kindle it is sort of odd in todays world that for all intents and purposes it's a single purpose device. I think with the new slates etc and reflective screens we'll get the readability of an e-reader with the multi-use of an ipad.
Just my 2¢