Swedish libraries has ebooks that you could borrow, and has had that for quite some time. Last I checked alot of them was in epub. There is not a huge amount of books available yet but e-readers havent really started to sell here in sweden so it might be better later on. You can borrow them for a month and then you will have to re-borrow them again if you havent finished the book. Pretty nice. But I see a problem here for the libraries, with a physical book there is a certain desire to have it in the bookshelf, with ebooks the reader has already overcome that desire and if he can borrow most books there will be a very little need for him to buy any. It is perhaps more of a problem for the publishers but if the publishers dont want their books to be available at the libraries then it is the libraries problem also.
Just some toughts on the subject