Is it just me, or is the sight of an old-school CD spinning in a clunky mobile player enough to make your skin crawl? OK, I admit to being something of a gadget bigot, but I’m not alone.

Led by the seemingly ubiquitous iPod, MP3 player adoption doubled to 20% of US households from 05 through the first half of 06, so says Forrester Research in its annual consumers and tech benchmark. Now that peer-to-peer song swapping has gone mainstream with services like iTunes and Rhapsody and self-made mash-ups are the rage, fewer people see the need or have the patience for CDs.

The Digital Consumer is indeed living the Digital Dream and the old-line world of packaged media is paying the price. The rise of broadband and spread of sophisticated handhelds allow more traditional media to be consumed in entirely non-traditional ways.

And it’s affecting much more than music. More download-heavy marketplaces are popping up for everything from ringtones to movies and the digital distribution for any manner of consumer and enterprise software is commonplace.

Next-gen video game consoles like Nintendo’s Wii will offer hundreds if not thousands of titles via virtual storefronts – quick and easy downloads of favorite games at your digital fingertips.

The possibilities are pretty much boundless for taking packaged media digital.

Consider what you can already do with pay per view and on-demand digital cable. Now imagine how cool it would be to have the flexibility and playlist personalization that is the Netflix brand pumped to your home through fat broadband pipes. Say buh-bye to DVDs and the USPS.

With 41% of US households now enjoying those broadband pipes, per the Forrester numbers, Netflix had better be careful. If it doesn’t board the on-demand bandwagon it might find some digital up and comer assaulting its packaged media model the way it took on Blockbuster with an online solution.

As the Digital Medium becomes more defined by truly Digital Media, you have to wonder what happens to the purveyors of traditional packaged media. It’s no surprise that retailers are plenty worried about the brave new world of digital downloads. But before you start selling your shares of Best Buy, remember the vainglorious stall-out of the bricks-to-clicks revolution that was the dot come era.

In those days everything was moving to the virtual world of e-commerce. No doubt, e-c has become an important part of the world’s economic fabric, but it hasn’t shuttered brick and mortar storefronts as once expected.

Brick and clicks co-exist and even flourish with the right business model because the digital consumer likes to slum in an analog world. Kick the tires, squeeze the shrink wrap, flip the pages.

It’s just that consumers also like the convenience and status of doing it online too, especially gadget-heavy Gen Yers and Millennials. The two aren’t mutually exclusive. Finding a happy medium between old and new will be the challenge and the payoff for retailers and the digital developers that supply them.

As a result, the rumors of the demise of packaged media have been greatly exaggerated. At least for the time being.

Many consumers have that hold it, smell it, collect it mentality. And the tech behind digital downloads still has a ways to go. Broadband isn’t exactly the efficient and economical vehicle it needs to be, set-top storage is too pricey, handheld storage too small and advanced wireless networks are still on the horizon in the US.

Come to think of it, maybe those old spinning CDs aren’t so bad. I listen to my Smashing Pumpkins collection on my iPod but I take a certain comfort in knowing I have all their CDs with all those liner notes and lyrics to thumb through if I ever get the urge.

Like a lot of consumers, I guess I’m equal parts digital and analog, downloaded and packaged.