My DAC allows me to listen to DVD/TV/HDD/Freeview Radio (via optical connection) in far better quality than the standard analogue RCA outputs from my DVD/HDD recorder.
Via USB from my computer I am getting great sound quality from iTunes lossless rips of all my fave CDs and (as Eddie pointed out) downloads, Youtube, internet radio (suprisingly good quality even at 128 or 192 kbps) BBC iPlayer etc etc. It has really opened up my tastes in music and viewing in the last few months.
I am especially loving the choice of 10,000 or more internet radio stations without egotistical, overpaid DJs or intrusive ads. (My favourite stations just get on and play music and may have a brief occasional station announcement every 30 minutes or so.)
I could never go back to being restricted to just CD or FM stereo. As good quality as they are, there is more to life.
I still have the CDP (it is an integral part of my Solo-Mini) but have no upgrade plans involving seperate CD players and when the Solo-Mini goes that will be my last CDP. (I have the DVD/HDD recorder and an iMac 20" as 'backups' if the laptop ever failed. And - of course - I regularly take external backups of the whole system to ensure my music has yet another level of protection.
I still buy lots of CDs - actually far more than before I had the DAC - and I still play vinyl with pleasure for it's qualities. So I am not predicting (or wishing for) the end of the CD medium. Just now I have a far better way (for me) of enjoying whats on them.