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I don't see books fading away, not completely.
People like to use the music analogy, but there's one huge difference between a book and a recording: A book is self-contained. I have picked up and read books dating from the mid-seventeen hundreds - books that were still legible after almost two and a half centuries. I read my daughter poems from a book my mother bought in 1955.
I once had a collection of pulp magazines - a form that's almost completely gone now. The five magazines left in the US are all digests now, not pulps, and only one really dates back to the glory days of the format. The closest thing to the pulps these days are books like the Executioner series - its up over 300 now and they come out every month with another short novel just like the Shadow - but in paperback.
Paper is going to stay, but I think the next decade or two will see the end of the mass-market paperback. That's what will be replaced by the ebook - the cheap entry-level read. You can already see the paperback moving up in the market with both trade paperbacks and the unwieldy new mass-market replacements at $9.99.
It's just part of the normal process, and ebooks will slot themselves in as th replacement for mass market, while people will continue to buy hardcovers and trade paperbacks.
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