In general, I believe in progress, and TV is no exception. I agree that the pervasive continuing storyline is a hot item right now. Lost, Heroes, Friday Night Lights, Dexter, and even the Office (American version) are good examples.
I think this is more of a trend rather than some final destination. There is something to be said for the timeless formula where all issues are resolved in the hour or half-hour and then next week you start anew. Many of the best shows of all time have followed this model (The Simpsons, Seinfeld, Leave it to Beaver, The Cosby Show). Yet, even within these shows there is some level of continuity.
I do have one problem with the current story driven shows is that it makes it difficult to get into a show if you don't watch it from the very beginning of its run, or heaven forbid miss an episode. I am completely lost with Lost now, and I don't see myself watching this show ever again.
Omar, you never even mentioned other hugely popular TV trends like the reality show (Real World, Survivor, Biggest Loser), the "live" high-stakes gameshow (Millionaire, 1 vs. 100, Dear or No Deal), and the talent show (American Idol, Dancing with the Stars, Rock Star, America's Next Top Model). What do you think about these formats?