Since Hard drives are really cheap now, is it better to burn all my music onto single layered DVDs or get a 500GB hard drive (at $105+tax)?

Does reading the optical media wear out drives really fast?

Not really, they are designed to read the media. Anyways if it did wear out its not a big deal, new drives are cheap now anyways.

If the music is important to you then both, backed up on dvd and hdd.

no, I'm just intending to play them without all this disk swapping. I guess having them compressed can yield 12 CDs per DVD, that is good enough. Because too much disk swapping can damage the original disk. (and it's tedious.)

If there not that important then just back them up on to a large hdd. If needed you could always re-rip the tracks from the cd.

It all depend how many files you have and what format you want to keep.
If it is WAV and you have lots of files it may be good idea to store them on HD as you can always copy them back and either do CD or MP3 file as you need.
You can look at it the other way. About 120 DVD(~500GB storage) will be about $50 may be less, but than you have to mark where is what and it is a big stack.
HD is one and you can store them as per album without worry that it will not fit on the same DVD.

Agreed.

Re: playing the music without all the disc-swapping - I've done as Yoda suggested, and play the music off my backups on the HDD, plus I always have my music backed up on DVD (and the original CDs) if the HDD goes down, or the stuff needs to be restored for any reason.

In fact, I don't even have a stereo now - no room with two PCs/desks in here, plus with all my music on a HDD ready to play, I don't need one.