I've personally never had a problem with playing from a computer, then again I always do highest quality bit rate rips of cds and don't bother with all the spacee saving stuff.
I have noticed a base difference with standard mp3 as compared to the wav files on a cd, but its never really something that bothers me much since most things I tend to listen to firstly aren't exactly too basy, and secondly always come through either very good headphones or very good speakers, and of course if you are that bothered there is always ripping in flak or wav directly (although that takes up mammoth amounts of space).
Dvds I do still buy, firstly because the amount of dvds I get isn't huge, so its not as much an issue, and secondly because video files take up so much more space, also as I said I am not going to pay to rent something I should by rights own just to make some company richer.
I've never really had issues with the cd scratching thing, then again when I own cds or dvds I am always very careful with where I put them. They are either in the case or in the player, and I'd never be interested in any storage method that didn't require a case.
@Aaron: cool on the collections, I have several of the disneys digitally and my lady and I play them often, as well as a collection of game music, though admitedly the only game music I have as physical cds are Xenogears, and Final fantasy 7 and 8.
The ff7 soundtrack is indeed awesome, though for final fantasy games I actually think 8 had better music.
With our dreaming and singing, Ceaseless and sorrowless we! The glory about us clinging Of the glorious futures we see,
Our souls with high music ringing; O men! It must ever be
That we dwell in our dreaming and singing, A little apart from ye. (Arthur O'Shaughnessy 1873.)