IMHO, Amazon's potential impact on the book industry is all about disintermediation. Book supply chain participants between the author and the reader will see their positions in the chain eroded or eliminated one by one.
Today's model is roughly:
Author -> Agent-> Publisher-> Distributor-> Bookstore-> Consumer
Amazon is working toward:
Author-> Amazon-> Consumer
I blogged a little about this last night:
http://blog.smashwords.com/