Clive Thompson in his Wired Magazine column this month has another take on the paperless book. He believes the paper part is not going away anytime soon.
You just have to look around my hometown of Portland, Ore. to see it. Publication Studio has largely built its premise as a publisher around only printing a book only when there is demand for it (and yes you can read it online, often for free). At the Portland State Bookstore, Odin Ink offers the capability for anyone to walk in with $10 and a manuscript and walk out with a book. And for the DIY crowd, The Independent Publishing Resource Center lets you learn how to create paper based media of all shapes and forms.
We underplay too much how well bound paper works as a device.