Ah, the obsessive music fan's age old dilemna. You love the music, and by proxy object, but everywhere you turn there are so many little plastic boxes staring at you that you feel like they should be paying you rent. Then there's the constant question of how to organize the discs, by genre? alphabetically by artist?
It wasn't without some difficulty but I eventually had to face the fact that the shiny discs were starting to run my life. I ripped the whole collection, (about 600 discs worth at the time) to mp3. Eventually I plan to rerip in .flac once hard drive space drops enough in price). The cds went into storage at my parent's house (I live in a one bedroom apartment).
I added artwork to the mp3s which I can view on either the computer or my ipod, but most of my listening is done with a squeezebox which I've hooked up to my home stereo. So I lost a bit of the tangible aspect of album listening where you flip through the booklet while you sit on the couch, but I the ability to cue up any song from my collection instantly without ever having to get up off the couch. Plus when you're having a party it's nice to have a display right there that shows what song is playing so that you don't have people asking you "Who is this?" all night.