Well I think one should realize that most cannot afford a mp3 player while a CD player is dirt cheap nowadays, hence a mp3 player's popularity isn't nearly high as the CD or tape player =\. Otherwise, mp3 players would most definitely replace any portable music device.
Plus with my music collection quickly approaching 100 GB (I use ogg q7, and mp3 vbr formats.. and maybe in the future I might change to FLAC), organizing my music is ten times easier through a computer than a book full of cds, I learned that first hand :p.
Oh I use mp3 players, an iRiver H140 to be exact. Just the thought of carrying 40 GB of music at any one time makes me glad I bought a mp3 player.