Good discussion gents.
With regard to whether CD is dead or very much alive, it all depends on where you view the statistics from: Sales are lower than historical figures, downloads are up by a huge margin, so some will therefore proclaim CD as past it. The real question here though is clearly in disregard of commercial success of any medium, it is based on sound quality from CD. This is where the medium has not fared quite so well even though it is nearly 30 years since inception. There are audio designers still working very hard on perfecting the data extraction/transmission/conversion to analogue, and have got in many ways extremely close to 16bit limit in my view. And yes, this does cost a lot of money as has been pointed out, but for me in my personal system, I have no need or desire to explore the possibilities of higher resolution just yet. The system that I more than happily live with, (that continually impresses with the sheer dynamics/detail/air/space/decay etc etc) does indeed utilise a mix of old and new technology, but the underlying principle from each designer is to extract as much of the original recording as is possible, even though this may require obsolete DAC chips, 1950's vacuum tubes, heavily worked and balanced Philips Pro mechanisms, and given a suitably cared for recording, it is staggeringly realistic. A friend often proclaims my music room as the 'Royal Festival Hall'.
Sabai is also correct of course, cabling being important along with many many other details, but for this discussion to focus on the 'front end' of 16bit, the digital interconnect is, (against the engineers perception) a likely area for data loss. I worked quite hard in this area, and got real improvement over the last couple of month's, the fruits of which will be used at CES in January.
Good recordings are very very real, with Reference Recordings/some Naxos/Decca/ etc being great, Eva Cassidy's Imagine is on as I write and is simply there. Eiji Oue (Minnesota) Stravinsky's Firebird Suite commands absolute attention, the list is endless really..
So, CD is very much alive in our household and will continue to be for quite some time..