I don't think it'll be replaced just yet, mostly because everyone uses floppies for transferring a single small file from computer to computer, as they don't want to waste a CD just for a file (and most people don't buy CD-RWs for some reason).
However, I do believe that Mount Rainier will be the technology that will replace it. Packet writing on CD-RWs is definetly the way to go. There's actually an article on this in this month's CPU magazine, but I don't imagine you guys get that in the UK, do you?