I buy CDs regularly from my local, independent cd store (B Side). They tend towards indie music but also sell mainstream stuff if it's good. Overall their cds are the highest density of quality stuff in the city.
I'm always surprised at the number of people who claim that nothing good comes out anymore. It makes me wonder if they have substantially different taste than I do or if they simply don't have an avenue for non-mainstream music. I thought 2007 was a GREAT year for music... there's quality stuff for most tastes in a wide variety of genres: Ryan Adams, Okkervil River, Radiohead, Arcade Fire, Band of Horses, Feist, The Shins, Blonde Redhead, Elliot Smith, The National, Wilco, Dinosaur Jr, Spoon, The Good The Bad & The Queen, Iron & Wine, etc.