I do think people will spend money to avoid 10 minutes of labor. No doubt in my mind. The question is whether SD cards actually save time.
Also, there are many people who don’t think of CDs as synonomous with music — teens and tweens in cell-centric cultures.
It seems to me that the key insight here is that being able to load music onto cells at the checkout counter is a practical business opportunity. Maybe SD cards can do it, maybe not. The important thing is that people have their cell or ipod on hand, many will be using their cell as a primary music device, and they already have their wallets out.