I just read this article
about the DVD and VHS sale figures for some of today's biggest hits, and one can easily come to the conclusion that VHS is dead. I would be interested to see VHS sales before DVDs were popular, as I don't think there were that many people that bought sell-through movies back then, at least compared to now.
But of course, this "death" only applies to the sell-through market, as VHS is still the most reliable and affordable method of recording stuff from TV. TiVo is great, at least according to Oprah (sorry, too much day time television), but it's not available in many countries. And as much as I want DVD recording to succeed, there will always be the problem of usability, and it's hard to see people who don't know how to set the clock on their VCRs suddenly becoming an expert at DVD recording (just knowing what type of blank media one should buy is a whole tutorial on its own).
So it looks like VHS will be with us for a long while yet ...