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The article specifically uses the word "download." But that may be carelessness by a writer who doesn't differentiate between downloading a whole file and reading untethered, vs. reading while connected live. However, if they're after the Blackberry market, page-at-a-time images would be right out.
I think the most interesting thing here is the size of the organization backing the proposal. Google is known for rather "experimental" projects that they may follow up with or not, but they do have access to an awful lot of content, and I don't think publishers will be able to ignore this entry into the eBook market. One way or another, the books are going online. The publishers will not be able to continue to drag their feet. And I honestly don't believe any DRM scheme will hold for long once there are a couple of million eBook readers out there.
It will surprise me if Amazon doesn't either announce or leak some info soon after this.
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