I used to be a MiniDisc guy. I've been in MiniDisc since 1999, before the MP3 thing really got serious. I never really liked MP3's because Sony's ATRAC blows away the "standard" 128 kbps MP3 in terms of sound quality. I had little interest in solid-state MP3 players when they first came around, and while I thought the first iPods looked cool and all, I still wasn't inclined to switch over. What moved me over was the combination of AAC encoding, reasonable drive sizes, PDA features, and size of the 3rd gen iPods. 192 kbps AAC files are actually good enough for the places where I tend to use portable players--airplanes/airports, buses/taxis, mowing the lawn, etc.--noisy places. 224 kbps AAC is probably as good as ATRAC. So I took the plunge and got an iPod.
Wow, do I ever NOT miss MD. Having 1000+ tracks on the iPod means that I don't have to have remembered to pack a specific disc if there's a particular song I want to hear later. I never have to dig through my bag on an airplane for a disc which I can't tell from another one in the dark. It's tons easier to make a mix via playlists in iTunes than it is to record one to MD.
The iPod convenience more than makes up for the very marginal difference in sound quality. At least in the U.S., I give MD like five more years tops--it's a dying technology that even Sony only supports in a half-ass (err, arse) way here. Oh, and Sony's role as a member of the RIAA doesn't exactly put me in their corner, either.
Oh, and iPods have a drastically higher coolness factor.