CheapyD and Wombat,
In regards to your discussion about digital distribution overtaking disc-based media, you're forgetting one MAJOR setback that could quickly end the argument for the foreseeable future: bandwidth caps.
Many ISP's have already begun imposing (...and enforcing) restrictions on the amount of bandwidth allowed per household per month; and the largest ISP of them all, COMCAST, has been trying to push forward with this for at least a year now. Also, there's a large number of people--my parents, for example--who live in "the boonies" and can only get "high-speed Internet" via a data plan with a cell phone company; and these plans have monthly maximum data usage levels a low as 6 GB's per month!
Any / all of these types of bandwidth restrictions make the idea of downloading or--to a certain extent--streaming movies basically irrelevant, let alone something like a PS3 game that weighs in at around 35 GB's or a 360 game that takes up 3 DVD's worth of data.
While I'm sure that there's ways around some of these restrictions, I think it will be a long time before we see the mass market adopt a digital distribution strategy, especially if their ISP's are fighting them the entire way.
Oh, and not to mention: the United States supports the largest economy in the world, yet our Internet speeds are significantly slower than much of the civilized world; and there's no way that people--myself included--are patient enough to wait for an entire 2-hour, 1080p movie to download.
Remember, the strength of consumerism is based on the ability to purchase something almost immediately to get that "purchase high" we all thrive on, then move on to the next expenditure (hence, why every CAG has a back-log of games)--if people have to wait for 12 hours before they can enjoy a 1080p video, then the whole idea of digital distribution fails.
In conclusion, while we've seen services like XBLA and PSN take off like rocket ships, I truly feel that 99% of the big-budget games are a long ways off from be distributed digitally. Case in point: many people refused to purchase the latest Siren game over PSN, but lots of people--again, myself included--have been ordering the Asian version from PlayAsia.com.
By the way, keep up the great show, guys: now that 1up Yours is gone, the CAGcast is the only podcast I really get excited to listen to every week (yes, even the Joystiq Podcast has started to grow a bit stale). Thanks for all your hard work!