well, yeah thats a big question, what will happen to vinyl?
there will still be reissues of older albums on vinyl, im pretty sure of it. but new recorrds put out on vinyl? that will probably die out soon. there is a niche market of out there for new albums on vinyl but who knows how long that trend will last before the nostalgia of owning records fades.
ive been reading posts on the TapeOp message board and there may be hope yet. There are many people in the industry who are not going to take this lying down (neil young anyone? he wouldnt let his albums be mastered digitally until recently).
I personally like analog better than digital (ive used both and sitting at my computer recording music just wasnt my thing) but one is not inherently better than the other. digital has contributed to cutting costs and making it easier for Joe Schmo to record his music and get it out there... but then again, do we really want that?