Led by Eric Flint, author of Mother of Demons, the science-fiction and fantasy publisher Baen is offering the Baen Free Library, 40 books by its authors available for free download with no restrictions.
"This will be a place where any author can, at their own personal discretion, put up online for free any book published by Baen that they so desire," writes Flint, who currently offers Mother of Demons and five other books on the site. He continues:
"Losses any author suffers from piracy are almost certainly offset by the additional publicity which, in practice, any kind of free copies of a book usually engender. Whatever the moral difference, which certainly exists, the practical effect of online piracy is no different from that of any existing method by which readers may obtain books for free or at reduced cost: public libraries, friends borrowing and loaning each other books, used book stores, promotional copies, etc."
I've read one of the books in the library: Doc Sidhe by the author and roleplaying game developer Aaron Allston. It's an entertaining and imaginative book that blends Doc Savage-style pulp fiction with medieval fantasy. I suspect that Flint's correct about the net effect book-sharing would have, especially in a fiercely competitive market like fantasy and science fiction where books get very little time on retail shelves before being pulled in favor of something else.