The Economist has a leader supporting the Google Books Deal, and an interview with Paul Courant, Dean of Libraries at Univ. of Michigan.
He talks some about the product that Google will be offering to libraries with this deal.
I have to wonder if this product will be the watershed moment for e books in academic libraries. If Google's library of books is big and broad enough to serve as a general library on its own, Google's platform for e books could become the place to do research in books.
Much of its success will depend on how much current content is in their index, and this is really dependent on Google doing deals with thousands of publishers. If Google's index is largely made up of older scanned books, it'll be a useful research tool, but not compelling as place for general research.
Google might become the place to do research in books, whereas recreational e book reading will happen through other vendors like Amazon.