The Centered Librarian points to The Online Books Page at the University of Pennsylvania, a listing of over 25,000 free books on the Web. While the site does appear to be indexed in Google, it might still be worth a personal visit if you're searching for something. Probably because it only appeared on the site recently, one title I searched wasn't listed at the top by Google, which instead pointed to Amazon, where it was available for $135, or Storming Media for only $37.95 as a PDF, while The Online Books Page pointed to the free PDF version on the FEMA site.
John Mark Ockerbloom has put a lot of work into this site!
Michael Stephens at Tame the Web points to an upcoming service called BookSwim that will launch the 1st quarter of 2007. Basically they're going to do the NetFlix thing for books - for a subscription fee (amount unknown), you can enter your name in a queue for one of their 80,000 titles and they'll ship you the book to read. Keep it as long as you like, then ship it back (no cost to you either way, other than your subscription fee).
I'm conflicted. I'm definitely not their target market, as I'm a heavy user of the local public library system, which has an excellent collection. Maybe for the rural folk? So maybe it's a good idea, but will it work as well as NetFlix? Aren't DVDs a lot cheaper to ship than books would be? And storing inventory will be a challenge with books - they're all different sizes, unlike DVDs. BookSwim has a brochure (PDF) that compares their model with that of traditional bookstores and libraries and has a few iffy claims (their books are always in excellent condition while libraries are at best "good" condition - not sure how they'll guarantee that one unless they're replacing worn books).
I don't think I'm knocking it just 'cause I'm a librarian; I don't feel threatened, and I think I think it's a good idea. Just not sure it's going to fly. Keep an eye on 'em.