Piracy will continue. People who simply do not want to pay for music or movies will try to get it for free one way or another--either through the Internet or just borrowing a friend's CD/DVD. My friend is such a person: he has never bought a CD because he just doesn't listen to music all that often. However, when he does want a song, he just borrows someone else's album or finds it online.
What really hurts the entertainment industry, IMHO, are not casual pirates who download their songs or movies off of Kazaa. It is the hardcore for-profit pirates that have their own stamping factories churning out fake and knock-off CDs. In China for instance, you can get virtually any CD for about 8 kuai (8 kuai = 1 buck). It's just a copy of the cover art and a CD in a plastic bag. You can get a real CD with the case, the linear notes, etc. for about 60 kuai ($7.50). However, there are instances where a pirated copy is sold as a real copy--software has been pirated in such a manner and such copies are even more dangerous.