The main problem with digital is that pixellation is unattractive, whereas grain looks more natural; your eyesight is also grainy (just look at a plain wall). Too many digital images look like still video.
The new Canon EOS 1Ds has probably got there in terms of resolution - you can make a 30" x 20" print from it - but it's not exactly mainstream technology.
I'm not too sure about pixellation problems. I have an example 12Mp image from a Canon G9 and I zoomed until it pixellated. At that zoom level the image would be nearly 2 metres wide. The optimum wiewing distance for an image that big would disguise much/all of that pixellation of course (I could see pixellation when viewing it sat at my desk at arm's length).
Zoomed to 1 metre across there really isn't any pixellation visible, even when I get really close to the screen. 12Mp is fairly mainstream now and 36" wide prints are fairly specialist
My 7Mp Canon's images starts to pixellate at around 56" wide (sorry for mixing metric and imperial) but we're talking about a 'grain' effect rather than noticeable square pixels.
www.dpreview.com allows you to download samples from the cameras tested. The lastest 12Mp and above models have pretty spectacular resolution (especially when you consider what's happening down at semicondictor level).
It's very easy to zoom into a digital image and spot pixellation (5 clicks does it on mine) but forget just how big that image would be if you could see the whole thing.
Note. Almost all the images I post on YACF are 640x480 which is only noticeably 'un-pixellated' at 6x4 postcard type enlargement.
Most people don't have the ability to print bigger than A4 and once you commit an image to paper you lose a huge amount of dynamic range so the gap between a projected film Transparency (as good as it gets?) and a Digital image displayed on a quality monitor narrows significantly.
I wouldn't like to bet my own money on being able to tell an A4 print from film and one from a 12Mp Digicam.
I'm now curious to see if DPREVIEW have got any images from 20Mp sensors