I rarely buy new games anymore. The last one I bought brand-spanking new, pre-order and all was Batman: Vengeance for the PS2. That was a disappointing spend of $70. There's no way to tell if I'll like the game for sure, right out of the gate. So, I wait for reviews or friends' opinions, rent it, play a demo, etc.
Since getting a PS3 on Boxing Day last year, I made myself two personal promises:
1) Don't buy any game for more than $30.
2) Don't buy a new game until you've beaten what you have.
The second has kind of fallen away, especially when I find great deals. The first, however, has stuck. The only exception I've made so far was pre-ordering Dead Rising 2. I've played 1 and love the game, so I know what I'm getting into, there.
Buying used, though? I've done that a lot for movies, particularly, and always have. I won't spend more than $20 on a movie (even Blu-Ray). But the majority of my game catelogue were used. In fact, there was a sale at my store a few weeks ago, where used games priced at $4.99 were also 50% off. So, I nabbed a bunch super cheap: Overlord, Top Spin 3, Devil May Cry 4, Lego Indiana Jones, Soul Cailbur 4, Shaun White's Snowboarding. These are all games I likely wouldn't have given a second look without that price tag. Some were worth it (Lego Indy, Snowboarding), some not so much (Overlord).
And then you have Steam, where you can buy the game, technically new, for some great prices. I think downloadable games, much like music is about 90% of today, is where the industry is going more and more. The capacity in systems to hold information just gets bigger and bigger, along with the ability (like Steam) to download them again any time you want. Now, if they were to lower the prices to reflect not having a physical copy, then I think it would work out better. Right now, they're trying to have their cake and eat it, too, and it's not working out so far.
Then again, is it just me, or are smaller studio titles starting to pick up more (pardon the pun) steam? World of Goo, Braid, Scott Pilgrim. Heck, even a growing studio like Telltale Games does their business almost entirely online (with the option to buy a hard copy, if you want). If that same model was copied by the larger studios (lower price due to lack of hard copy; or provide hard copy if requested), then wouldn't that make the idea of downloadable games more viable? True, it might slowly rid us of used product, but it's no different than the music industry and mp3s.