I tend to go through phases with my Kindle 3. I'll read a couple books on it and like the convenience (reading while eating lunch is a HUGE plus to me). Then I'll buy a real book that isn't available on the Kindle and the joy of it will drive me away from the Kindle for several months. Then I'll pick up the Kindle again for a specific book, lather rinse repeat.
I do like the Kindle, I don't think I'd ever get rid of it, but it hasn't made me stop buying real books.