Well, seeing as how I have a decent broadband connection, I've been doing more and more digital purchases it seems. I have a Steam account, so I've bought some games through Steam, and also I have used direct2drive as well. Some of the reasons for doing this are just being plain lazy and also getting some games I can't find on the shelf. So rather than wait a week or so to get my PC game from amazon.com, I just go to some digital distribution service and download it from there. Also, it's cheaper because I don't have to pay shipping or tax on top of the retail price. So that's another plus.
However, there are some issues with doing this. If you don't back up the installation files, you'll have to download that crap all over again if you ever get a new hard drive or computer. But a smart person will burn these to DVD for backup after downloading. Also, some games are just too big to justify downloading. On EA Link, you have the option of preordering Command & Conquer 3 and downloading it through EA Link. But the game is freakin 4 gigs approximately. Even on cable, that's going to take a while. I'd much prefer to just walk into the store and just grab the box.
So, I think digital distribution is good if you have a fast connection and the game you are trying to download isn't too big, relatively speaking.