Digital distribution is the way forward.
I loved Half-Life 2, got it cheaper than I would have otherwise, gave the actual devs a bigger cut of the profit than they otherwise would have gotten and never once had to fiddle around with a CD.
The only real agrument against is that there is no option for a smaller install (though HDs are so cheap these days that it's pretty irrelivent) and for people who like having a manual to shove up their noses (Hearts of Iron 2 is a hugely complicated game, but one which is relatively intuative to learn, so I simply used the PDF as a quick referance and never touched it again, though it could be an issue with other games, but still, meh).
EDIT: oh yeah, modem losers get the shaft though.