Yup, I buy both CDs and DVDs. When I'm given iTunes gift certificates, I happily use them for scattered tracks/albums that might be hard to obtain in hard-copy...but I far prefer having a hard copy. Burning backups doesn't really count in my book; my family has CDs from the early 80s that are still going strong, and I wouldn't trust burnt discs to have that lifespan. I'm not a fan of re-purchasing media. With that said, I promptly rip every CD I buy into iTunes.
However, when listening at home, 9 times out of 10, I'll load the CD player rather than streaming off of AirTunes...better audio quality for sure (noticable over a good HiFi...not so much over earbuds/computer speakers, occasions for which .aac suits me fine.)