I still prefer the tactile physicality of "real" books and still buy them. The attraction of e-reader is the obvious - convenience, lots of books on 1 device etc, but also - a free library of classics, of out of copyright material I'd never even heard of, now at my fingertips.
I can't bring myself to "buy" an e-book - to me its an electronic file with no substance. So anything recent I want, I buy the physical book. But if I'm away, or commuting , I pull out my e-reader.
I love mooching in secondhand book shops - but at the moment on my Sony, I'm reading an account by Mark Twain of travelling across America in a stage coach! For free. How much would THAT cost in a used bookshop?!
I don't think paper books will die out - its not like vinyl when CDs came out, where they were promoted as being far superior in convenience, quality and indestructability. E-books offer convenience and portability but not the others (e-ink is still second best to read, behind ink on paper). Yet, at least. I guess the technology will only get better.