I will only buy music. I have too much respect for the musicians that I enjoy to steal their product. Not to mention the hardwork that goes in to album art and what not. I love having the physical product, and have never purchased from iTunes because of that. If I hear of a new band that I was previously unaware of I go to their Myspace page and take a listen. If I like it I head down to Soundscapes or Rotate This and grab the album.
Far too many people don't realize that illegal downloading has really ruined music. Illegal downloading has caused some great bands to never get to release their material because they're stuck on a label that can't afford to release their stuff (see Greenwheel, who had to legally change their band name to Go Van Gogh just go get out of their contract with Island, after building a name and image for themselves). People say "ya but bands make all their money off of touring!" which is mostly true, but a lot of touring is based around the release of an album. I can't think of any bands that release one album and then tour it for 5 years without providing their audience with anything new.
Then you have the stores that are struggling because people can get whole albums for free. Independent stores like the ones I mentioned above are really important to local music scenes and if not for Toronto's huge indie scene, they probably wouldn't exist. Those are people's jobs and livelihoods on the line. Also, this has a direct impact on local music scenes as often these stores are promoters and sell tickets to local shows. The residual effects really do go on and on.
Ultimately, I find it insane that people are okay with stealing music. I think it says a lot about the respect we have for other people's work and its value. I watched a guy in class yesterday download 5 Tragically Hip albums from a torrent site. When I told him I don't do that, and that I like to support the bands I like by buying the album, he said "well I bought their first cd." I couldn't help but shake my head.