I personally love a physical book (the smell, the feel...yes I'm a nerd) and if I REALLY love the book, I'll make sure to get a hardback book for my collection if one's available. When I'm working or driving I like to listen to audio books. I do want an i-pad or an e-reader (still debating between the Kindle and the Nook) though to make reading whatever I want from my collection easier when on the go.
I just got a Nookcolor and I love it. I had doubts about an ereader because I do love the physical feel of a book, but I've adapted quickly. If you buy a cover for it, it feels just like holding a book. I chose the Nookcolor because of the screen size and because I actually wanted the backlighting feature. Some people don't like that, but I read in bed and it's really nice to be able to do that with the lights off so my husband doesn't wake up.