The issue of the progress of electronic capability has been fairly well described as
Moore's law - Wikipedia, the free encyclopedia
Moore's Law (named for Intel co-founder Gordon Moore) roughly states that the number of transistors that can be packed into a fixed space doubles approximately every 18 or so months. For you and I, this roughly translates into electronic equipment (computers, hard drives, cameras, etc) that doubles in storage capacity and processing speed every 18 months. This trend has held since the middle 1930's and is predicted to continue for approximately another 20 years before we hit physical limits of size, power consumption, and heat dissipation of current silicon manufacturing processes.
One of the issues that is buried in Matthew's response (particularly the link to the IBM article) is that silicon manufacturing for creating central processing units in PCs is running up against a physical wall: the width of the electrically-conductive traces that are etched into the silicon during the manufacturing process. Current state of the art is at or very close to 45 nanometers (10 ^ -9 meters). As you make the traces more and more narrow and pack them more closely together, the electrons racing along the traces begin to exhibit bad behavior such as randomly jumping from trace to trace. Needless to say, this causes absolute havoc with the processor because things no longer behave in a neat and orderly manner.
This physical limit is just part of the physical realities that are behind the push for multi-core processors as opposed to a single processor that just runs faster and faster (and hotter and hotter). The width and density of the traces on the silicon chips are also related to heat-dissipation issues.
In the larger context, we are exploring the issue of a plateau for electronic capabilities. I don't think we have yet reached this plateau. I don't think we will be there for another 20+ years. By the time we get there, there is likely to be a different paradigm that governs the R&D efforts related to our electronic gadgets, enabling the growth in performance to continue without much interruption.
Will it stop? Not in my lifetime - and I still have quite a number of years to go..