It will inherently vary on the user. Consider the following conditions.
Screen size: This is one of the best trump cards that desktops have. Bigger is never enough. Although wee now have 17" laptops, they are far too bulky, get too hot and too expensive. Plus, you don't get a 24" screen by default.
Customizability: Desktops have the long term value of customizing. This really doesn't need further elaboration, except that for a notebook, you get what you paid for initially and there is little you can do about it a year down the line.
Performance: Unlike you, I am not speaking of general user. I speak about gamers and media people. Gaming, encoding, rendering etc on notebooks will never be able to be on par with Desktops.
Cost: For the cost of a decent good performance notebook, you can get a really hi-performance desktop.

If your average person is looking at the above conditions, then it can be said that desktops are unlikely to be replaced. If at all, the will share the space with a notebook.

However, laptops or other ultra portables will definitely become far more popular than they are today.

This is what I think can happen:

A normal user will most likely buy a decent laptop which allows him to do all his stuff. For watching movies etc, they will either use an external display or go for a large screen initially. It may happen so that the cheap desktops that wee can buy now will no longer be produced. However, the cheap cost may give some users to have both. Or something like a netbook and a HTPC.

Professionals and enthusiasts will however, have a Hi end desktop and a mid-range laptop.