Personally I find that the image quality that my DSLR gives me is streets ahead of what I can get from a compact. The best compact I have used is the Canon G9, at base ISO in good conditions it can produce stunning results. However when the light starts to fall and you push the ISO the IQ falls away dramatically. Would I carry on taking photos if it was all I had? Yes, I often take it out as it's small and discrete - but I know I'd miss the DSLR.
While I do view my images on the screen I like to print them out and I don't want to be limited by the camera. I recently got some 20"x30" prints done, I doubt they'd have looked as good from a compact.
As for editting software I still run on the most basic packages - DPP for RAW conversion and Elements for the rest. Sure I'd like CS3/4 but I cannot justify the cost, I don't think my images woudl improve much but it would make some processing stages easier/faster.
What will I use in the future? a no brainer for me, I'll keep uing my DSLR and lenses.
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