Treehugger has a little article up about it today - nothing new, the usual save a tree/experience of an actual book debate. They point out that so many books are poorly bound, unattractive, unsustainably made. I don't think the Sony Reader is the solution to this; I think the solution is already there: recycled paper, paper from other products, and it's more the mass-produced books that are unattractive; small presses make attractive books aplenty. Apples and oranges, whether it's audiobooks or e-books.
The gadget lover in me wants a Sony Reader real bad, though. I somehow think it would allow me to surreptitiously read books in situations where it would be inappropriate to pop open a paper book - meetings, holidays, traffic - as though I could pass it off as consulting my schedule, or something. Misguided, but fun.