@dafu: Is that all?
Don’t get me started… 
@William: Does this mean, Amber, though, that you make ALL your incidental notes and observations on a computer? (Or at least a digital device.) I love the idea of your system but the hurdle I face is that I carry around a paper notebook, and that’s where all my incidental stuff goes.
William, no need to feel like a Luddite—or at least, if you do, count me in as well. You are right, now that I read over what I have said, it does look as though I type every single thought of mine down on a computer of some sort, but really nothing could be further from the truth. In fact I have historically written close to 90% of everything down with paper and ink (at least when it comes to writing in a diary). Nothing fancy, no digital recognition pens. Just a Moleskine and a black marker pen, or a stack of index cards with a binder clip if I’m in the mood for that. I say historically, because lately I’ve been writing a lot on my Alphasmart. I expect as I acclimate to the device I will use it less frequently (bit of a honeymoon thing going on as it is only a month old, no doubt), but even now I only bring that along when I know I’ll have a convenient place to use it. If I’m just going to be walking about or riding a bike with no particular destination in mind, it’s the old Moleskine or index cards for me.
As for transcription: that goes in phases for me. There will be periods of time when I religiously type in everything that I have written, scan the index cards or journal pages and cross-ref them to my media folder—there will be other phases where I just type in what I have written—and still others where I don’t do any of that at all and it just sits in notebooks. I also have phases where I get all ambitious and transcribe old journals that haven’t been typed up from these “dark” phases (I put a little mark next to every entry that I transcribe, making it easier for my future self to figure that part out). So eventually it all does get transcribed, it just may take five or six years for some of it. 
And yes, once it does get typed in it goes into the System, back-dated accordingly. I also try to mark down where I wrote each entry, so that I can search by location (all notes written on bus line #44, say), and a short title, but often it’s just the time. Sometimes I can remember where I was, sometimes not.
When I transcribe I use a sourcing system. I have a “Source” meta-data field that I use to indicate where the item came from. For gathered stuff this is somewhat like a citation, or a URL, often times its a reference to an ID in my system, which is sometimes a more detailed description of the material, as described with my method for taking down book notes (many of which, as you can imagine, are hand-written). Each of my hard-copy journals gets an ID number as well, and so any entries transcribed from that journal will use that ID number in their source field. Since I use my odd timestamp in “real life” as well, that means the journal pages are marked with these dates and times, and thus it is fairly easy to go back and find the original page, if I hadn’t scanned it in the first place.
Why go through all of this trouble? Well, you could say journalling is a bit of a hobby for me. I write a serious quantity of information down; probably to the tune of an average of 40,000-50,000 words per 40-day period. You could certain speculate that one of the reasons why I came up with a system for “thoughtless filing” is simply to handle the quantity of information that I’m throwing at it all of the time. This counts everything, though. Even this forum post is counted as part of my journal, ultimately. I consider every scrap of what I write to be a part of “my documentation”, so to speak, and given the content of this message, it will no doubt be linked to and analysed by my future self, as I track the meta-trail of how I record my life.
Another reason I go through the trouble of transcribing is that it makes it more easily available, and I feel there is an important aspect within the transcription process itself that a direct digital transfer cannot match. It’s one of the reasons why I’ve eschewed “syncing everything”, because I feel there is a useful aspect to reading what you have written and typing it up. I don’t just transcribe verbatim—most of my hand-written thoughts are in shorthand and rather tersely written—so transcribing is almost a bit more like rewriting. I’ve even ascertained how many days I should wait before transcribing. I don’t transcribe the things I’ve written that day at the end of the day, but rather the things I wrote about a month ago. Why? It distances me from the heat of the emotions, if any, and if the thoughts were reflective in nature, allows me to use the time that has passed between that point and now as an asset in my rewrite. It is, at the same time, not too far away. It’s not so far in the past that I no longer remember the person who wrote the entry, except in vague abstract, it’s still the “me” that is steadily evolving. It’s not so far in the past that I no longer remember the context, or wonder precisely what I was going on about.
In answer to your question on the replacement of the notebook: I have yet to find a device that can truly replace the pen and notebook, and even if I did, I’m not sure if I would use it. I rather like rewriting everything. I don’t think a digital pen, like jtranter points out, would work for me. For one the shorthand aspect wouldn’t really go over well with any kind of OCR, so it would just be moving the “ink” from one spot to another. I’d still have to type it up.
I take it you scan everything though, since you mentioned browsing your writings digitally? A digital pen might indeed be an interesting thing to think about, then.