As you all know by now, I love collecting CD's. But to be honest, I rarely listen to them. When I receive a new CD I rip it in "Apple Lossless" format to save on my external hard drive, just in case something happens to the physical CD.
Next, I rip AAC files of the CD, in a higher bitrate than the tracks you buy on for example iTunes. These are the files that I listen to in my iTunes library and on my iPod.
However, I still love owning physical CD's with booklets and I buy music legally to support the artis and the songwriters. Being an artist myself, I know how much time, hard work and money that goes into making music and I think that should be rewarded somehow.
I sometimes buy music from the iTunes Store as well, but I prefer CD's for the ability to rip the music in a higher bitrate, to get the best sound quality possible. But that's just me!