What is manual software testing? Boardly, Manual testing is activities which are executed by human such as gathering requirement, writing test cases based on the requirement and executing those test cases on the build (compiled code).

Whereas, automation software testing involves using a tool for writing and executing test cases/scripts. Computers (tools) are fast, reliable, capable of multi tasking, they do not require coffee breaks. But the point of concern is "tools cannot think." Your automation test cases/scripts are as best as your manual testing test cases. Tools convert manual test cases into executable scripts, nothing else.

On the other hand, a human can think. They have the ability to think on their own and make decisions. They can decide and write test cases on the areas scripts cannot reach. Also all test cases cannot be automated. Tools cannot decide the usability factor of an application.

The best way a tool (Selenium, QTP, Rational Functional Tester, Silk etc) can be used is where there are large number of regression test cases which are required to be executed over and over again, build after build. Also tools (LoadRunner, WebLoad, JMeter) are best used when it comes to performance testing. It can replicate large number of virtual users and generate loads of desired quantity which will be very difficult for human testers to do.

Using automation software testing is very helpful but the simple answer to the question - "Can automation replace manual software testing?" is "No".