I just caved and bought some actual CDs, for the first time in I-can't-remember-when. I usually buy from iTunes but they won't let me get some of the random British stuff I like, or some things that are out of print.
The stuff I'm burning and transferring to my mp3 player are things I've owned for years. I'm even kind of embarrassed by them, really. I put some of the cds in on my birthday a little bit back and they made me very happy, so I'm putting them in a more transportable format.
I always take music recommendations seriously, though, so will keep Dubstar in mind. :)
Our MP3 collection is still 99% ripped from CDs that we own. I've bought a handful of songs from Itunes but I never trust my ability to keep track of them and like having the backup of a physical CD. Also, unless you are buying something that's currently a hit, you can usually get the CD for much cheaper than Itunes.
Sleepyhead is this ultra-random indie group that I heard on KLSU, the college radio station I listened to when I was in high school. I tried to download it (legally and otherwise) for years and finally figured that since I was already buying other CDs I should just go ahead and get it as well. Like, ten years later.
When I was a freshman in college (this was 2001) we were having a discussion in a music class about the future of music technology, and I chimed in about how not long from now, new consumers wouldn't buy nearly as many CDs, and old consumers would start making the transfer, both through purchases and ripping, to enjoying their music without CDs.
All of the upperclassmen looked at me like I was crazy.