It feels as if we are on the verge of a major shift to digital books (see my earlier thoughts on this), though I'm not sure that the Amazon Kindle will be the catalyst here (from the photographs, it doesn't have the design elegance of anything that Steve Jobs produces for Apple). The digitization of millions of books by Google is clearly going to affect all readers one way or another (even those who like to read from paper - since print on demand is clearly a more efficient process than storing tons of printed books and then pulping a percentage of them). There is an interesting article by Jonathan V. Last called 'Google and Its Enemies' which summarises the main issues nicely. What usually gets left out of breathless sci-fi pieces about the digital book revolution is the effect on writers. Whilst research gets easier, getting paid for writing gets more complicated, and in most cases much tougher. Or else the future is presented as a world in which everything can be downloaded for nothing. With large players like Google prepared simply to ignore existing copyright legislation and widespread copyright infringement on the Web, long-tail writers could be in for lean times...What writers need is fair payment for use. That will keep us writing. Collective licensing of the kind administered by ALCS is probably our best bet.
Meanwhile I'm trying to train myself to read more on screen since the illiterate of the future may well be those retros who refuse to deal with anything except paper. I've found www.dailylit.com very useful in this respect.