At work, when the Kindle 2 was released, there was some worry that it would start to have the same effect on us as the iPod and iTunes has had on the music/cd industry.
I'm of the opinion that even with new technology, there is just something about holding an actual book that people cling to. Being able to hold a copy of a book their parents read them when they were little, or getting their hands on a copy of the first book they really got sucked into. Not to mention the smell and feel of a new book...or an old one, for that matter.
I think Penny Arcade sums it up quite nicely. I think we're going to be ok.