A research press release by ICM/Napster finds that:
1) UK owners of MP3 players only fill them to 58% capacity.
2) 16% of UK adults own such a device and 60% of those bought their players in the last year.
3) 66% of music on players is ripped from CDs, 10% is copied from friends and 17% is downloaded legally while 6% is downloaded illegally.
4) The benefits of devices are listed by consumers as follows: convenience (43%), portability (42%) and ease of use (18%)
What's most interesting to me is #3, showing that CD purchases are being used as the main source of mp3-player music. My guess is that as long as DRM and low quality, and the if-you-lose-your-download-that's-too-bad policy of online stores continue, CDs will continue being the preferred way of getting music for your iPod.
I've found at Magnatune that the majority of people who buy a CD also take us up on our offer to "download the music now while you wait for your CD"