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Voted DD, almost voted cloud. Cloud computing is the future, and I imagine it will eventually seep into the game market fully. Onlive doesn't count (yet maybe), but imagine if you never had to buy hardware, you just pay a subscription fee to use the hardware, and maybe also the software (at a higher price). I'd imagine there would be no lag eventually, and you'd be able to have the best graphics at all times. On paper, sounds cool, who knows when it'll reach a point where it's worth it though.

But DD is the best right now for me. Physical copies are starting to turn into clutter. I've been moving around a bit lately and it's a pain to move all the stuff. Add in the amazingness of Steam.
Recent purchases:
TF2 for $2.50
Trine for $5
Torchlight for $5
Mount and Blade for $5
L4D2 for $30 (within a month of release)
Psychonauts for $2
Spellforce 2 + expansion for $7.50

Non-sports bargain bin games don't go that cheap around here.

When I move again, I'll be loading all of my games into a binder and keeping all the cases boxed up at my parents house. They'll probably stay there forever.