The lovely folks at Wired's Gadget Lab have written an excellent story about e-books and ze eviiiil DRM (Digital Rights Management). Basically, the DRM has essentially killed the e-book considering they, and book publishers, are petrified of users abusing their knowledge of technology and using the old "copy, paste" trick. The DMCA (Digital Millennium Copyright Act) prohibits "going around" copy protection, and has made it practically illegal to copy any text in an e-book that is protected by DRM. Gadget Lab says they want their e-books in a file format of their choice, and that they're willing to pay up for it. I think that people should have the option of having e-books if they so choose! Personally I'll always be a fan of the good ole paperback, but it is strange that with the internet, and all of our shiny gadgets, that books are still in the same format they've always been, with no upgrade.
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All hail Baen Books and their webscription.net E-book site. Not only is their content DRM free and priced less than "dead tree" version, but there is a respectably sized back catalog of totally free E-books. They recently added books from Tor and Del Rey as well. Science Fiction readers rejoice.