The debate has really only begun, but here is an article that may be of some help, "Are E-Readers Greener Than Books?" The article references a study that looked specifically at the Amazon Kindle and concluded, "... that, on average, the carbon emitted in the lifecycle of a Kindle is fully offset after the first year of use. "

There are competing arguments, but I have not yet seen a study that shows that e-readers are worse than regular printed books from an environmental standpoint. I actually received an e-reader over the holidays as a gift and am on my third novel with it. It took a little getting use to, but I do enjoy it. I have other concerns besides the environmental impacts however, including the impact on local bookstores and businesses.
 

Thanks Niles!  I also just came across a study by Princeton University with results showing that student who used the Amazon KindleDX electronic reader "reduced the amount of paper they used to print course readings by almost 50 percent."  I hadn't considered conserving printed paper as a possible benefit.
 

I've always had a similar question and have considered an e-reader myself, but while paper is saved what about the impacts caused by mining for conflict minerals? I wonder if there's a report that compares the paper saved vs. the metals mined with the increase in popularity of e-readers and other electronics.