I'll buy a CD from a band that I REALLY REALLY want, like when the next STP album comes out. If there is an album that I am remotely interested in but I don't want to clutter space on the CD shelf, then I'll buy the digital copy and download it. I think the days of diamond album sales are long gone.
Emusic.com is a great website that has idependant releases, as well as some major label artists for a decent price. (Like Pearl Jam, Bush, Alice In Chains, Aerosmith, The Clash, to name a few) When I joined, it was $20 a month for 75 single track downloads. Now, I think you get 50-55 for $20, and it's now $30 for 75. I loved it because I downloaded a TON of albums that I normally wouldn't have bought, from indie artists like My Morning Jacket and Okkervill River, to metal bands like Iced Earth, Nevermore, Opeth, etc. I would recommend to check it out. They have a HUGE variety, not just rock and pop, but jazz, world music, techno, etc.