I started down this path this year. I gave away my DVD collection, about 100 movies, to the library. Many of my books went to places like the children's hospital and battered woman's shelter. Now I strive to keep everything digital, only getting physical copies for things I really like or aren't offered digitally.
For movies I'm really impressed with Vudu. The films are expensive to own, so I choose carefully, but they stream 1080p instantly and I think the PS3 app is slick. Books are my weakness though. I love buying new ones, old ones, annotated versions of classics, leather-bound editions, etc. Switching over to eBooks has been a rocky road.