According to the UK Times, Google is "working on a system that would allow readers to download entire books to their computers in a format that they could read on screen or on mobile devices such as a Blackberry." This will apparently be a part of Google's Book Search service.
Electronic books have been around for quite some time and have never really taken off. Who know, maybe its time has come, but I just don't see it. I'm as geeky and in love with electronic gadgets as the next person, but I'm also an avid reader, and I prefer a book over a mobile device any day of the week.
I predict this will be yet another pet project that Google fails at. Ah well, I guess if you've got the kind of money that Google has, you can throw it at as many bad ideas as you want.