Canadian copyright legal scholar Michael Geist writes about a mini version of the Google Book Search copyfight happening in Newfoundland. "The President of the Writers' Alliance of Newfoundland and Labrador has expressed concern that the plan will make it harder to sell books." Sigh. Michael points out that it's more likely people will find out about the books for the first time and then want to buy them.
The University of Calgary also has a couple of heritage digitization projects, one called Our Future Our Past: the Alberta Heritage Digitization Project, and the other, in conjunction with the Université Laval in Quebec (among others), called Our Roots. I do know that copyright permission is obtained for everything that's scanned and posted on these two sites, and to the best of my knowledge nobody has raised a red flag about potential lost sales.