They discontinued it because Pentax can only produce two bodies at once; mostly three but I do think K20d is gonna kick the bucket sooner or later as well (all the K20ds that can be produced are probably already produced). This doesnt mean that all K200ds have automatically stopped working of course
If you can find one then yes, you should buy it!
It's 'replaced' with K-m and K-m has also been replaced by K-x (some people would argue that the kxxxd line is dead since the featureset and body ergos are different).
I personally think K200d is of a camera than K-x minus the video, high ISO, and lowlight AF (although these three are reasons why I'm going to buy a K-x soon)..
If you can save up for K20d then you should go for it... that one is more of a camera than k200d, and the difference in price isnt massive. Keep in mind that it is a bigger camera though. I often hesitate taking out my k10d sometimes if it's just a short walk and took my K100d instead.