Hardcovers are more prestigious. They also last much longer and can stand up to a lot more abuse than a softcover. They're for people who want to build and keep a true library. They're also easier to read, in general; larger print and easier page handling.
Most of the stuff I get that I want to keep, I get in hardcovers.
The standard wait for hardcover to softcover is one year, depending on the publisher. This allows time for the book to recoup some of it's cost at a higher profit margin. People generally buy hardbacks as gifts, as well. Sometimes a book will come out sooner in paperback; more often than not that means it underperformed, but not nessesarily. Some books, like the Song of Fire and Ice, which are insanely popular, can go 18 months from hardcover to softcover.
Some of this is due to inertia. In the early days of softcover publishing, paperbacks were bastardized versions of hardcovers. They were often abridged, or sometimes re-written summaries of a hardback novel; they were for the poor. (This is the reason for some of the lyrics in the Beatle's song Paperback Writer. Also, in some older paperbacks you'll see little disclaimers like 'this contains the full text of the novel'). Thus, the prestige of the hardback book.
