Email is definitely dying. It's been choked to death by spam. As this survey shows, most of use prefer IM to email (well, except for the older generations).
I think there MIGHT still be some hope for email though.
What Gmail has done introduced some changes to the email paradigm. They have pretty friggen good spam detection, so I don't even see most of that crap. Replies are automatically "threaded" much like discussions in a forum at BigBlueBall. You get lots of space so you don't NEED to delete stuff (although I archive regularly). The search functionality makes it easy to find past conversations. AND it integrates nicely with Google Chat, storing my chat logs right next to my email conversations.
That's all a good start, but apparently both Google and Yahoo are looking at ways to improve. A LOT of people are doing more of the communication with their friends on MySpace, Facebook or whatever flavour of social network is popular in your particular corner of the world.
Saul Hansell of the New York Times wrote a
great article that looks at what Google and Yahoo have in store for email in the future. Basically, they already know who your contacts are, and who you email most often. This forms the basis for a TRUE social network, where the strength of the connections is readily apparent.
So imagine... your inbox could automatically sort things by importance to you (based on the importance of your relationship to the sender). I can see this going even further. Imagine that if I'm at work, email from my co-workers shows up high in my inbox. When I'm logged on from home one the weekend, it shows up lower. Take presence and location awareness, strength of connections and context, mix in instant messaging, VoIP (you can already do voice mail in Gmail) and you've got a kick-ass communication platform.
So just maybe email isn't quite dead yet.