A contrary opinion here. I need to digitize my vinyl, not to eliminate the need to listen to it, for I will continue to listen to vinyl on the big rig. However, for casual listening, and especially mobile use (car, iPod, etc.), I must digitize my vinyl. If money were no object, I could buy downloads or CDs of my LPs, but money is an issue. Besides, my results so far, even on my modest rig, have been delightful. CDRs I make sound much more dynamic and smooth than the majority of my commercially produced CDs.
My virtual system is posted, but the basic chain is:
Thorens TC-166 MkII/Ortofon OM-30 Super -> Conrad-Johnson PV11 pre (w/phono) -> Kenwood GE-7020 EQ -> Marantz CDR-632 stand-alone CD recorder. I use inexpensive, but good quality CD-Rs from Taiyo-Yuden. The EQ allows me to make subtle adjustments that work well in my car. I clean my LPs with the KAB EV-1 record cleaner (a no-frills vacuum cleaning machine), and surface noise is not really bothersome (but there is some, of course). I monitor the recording using Grado SR-60 cans (a terrific value).
Although many audiophiles suggest the Alessis CD recorder, the Marantz (TDK rebadges the same machine, too) is a lower-cost, less feature-laden machine that does a very nice job with analog to digital recording. I think it is on sale at SuperMediaStore.com this weekend. SuperMediaStore is a good source for blank media and other related items, too.
I spend more time listening to music in my car than anywhere else, so I am continuing the long slow process of digitizing my LPs. I do one LP each night, manually inserting track numbers in real time (I miss about 5% of them by a second or two). To save time, I just use large Post-It notes to hand-write the track listings, and stick them in the clear side of the jewel cases. I use a Sharpie to label the CD-R.
IMO, the whole process is kinda fun.