I use both, usually I first try to get a digital copy since I can carry the e-reader with me more easily; That won't stop me from taking a physical book too, however.
I'll also buy books I really liked in paper form to hold onto. (If I really really really like a book I'll get a third copy for lending purposes)
I got my first Kindle when I was 17, with money from a summer job, now I'm on my second one...how I miss that keyboard ~