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I'm interested in how people like Steve see composer's rights, because as has been pointed out, it's all very well coming up with ways to pay the people who perform the books you write, but we should probably work on paying the people who write them too.
My expectation is that we'll see more and more sales of ebooks, with or without DRM. We'll probably also see more upsets when people discover that the books they've temporarily licensed in some way are not actually theirs, which will hopefully lead to further pressure against DRM.
One thing to consider: photography used to be a hobby for rich people, then it was something many people did a little bit of and a few got paid for, and now it's just background noise for the most part. The people who get paid for taking photos are the ones who are add something special to the process. Either they're photojournalists who are on the spot or they're well connected (so they get photos of interesting things) or they're just plain good at marketing. All that as well as being capable photographers.
I think writing is going through a similar transition, and many publishers/authors sound at times very like some of the pro photographers I know who whine about new competitors with cheap digital gear kicking them around in the market, or worse still, selling at a lower price. Think about the dung-flinging between bloggers and bought media that we see. Novelists will probably suffer a similar fate - some writers at Baen are already involving their audience, and there are a lot of enthusiastic amateurs out there, some producing works of excellent quality. I predict that the next killer app will be a book-sharing board in the vein of flickr and smugmug, which will dramatically speed the filtering process that brings the good stuff to the top.
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