Interesting points Jesse. I'd take issue with the acoustic instruments one though - although there are more electronic instruments available now, I'm not too sure that music created with acoustic instruments is actually declining. I think there has been something of a reaction to electric/electronic instruments and that a lot of people are returning to un-amplified/un-synthesised instruments. I'd also add also that in my opinion the choice of acoustic/electric instrument doesn't necessarily dictate whether something is folk song or not.

Purely oral traditions might be dying out but different arrangements of songs/tunes are being made all the time. Does this count as part of the folk process?, and more importantly, as part of the transfer from one generation to the next?

Pete.