If Amazon (AMZN) was comfortable with its spot atop the e-reader market, it just got a wakeup call from Barnes & Noble (BKS). The brick-and-mortar book retailer's e-reader, the Nook, which hasn't even hit stores yet, is in pre-order nirvana right now. The first run for the Nook occurred at the end of October (the product was introduced on October 20). These buyers were told the reader would ship on November 30. High demand resulted in backorders, so the next wave of pre-orders was scheduled to ship on December 7. Now, a third group will have to wait until December 11.

This product is on fire, and it still isn't even on shelves yet.

Mary Ellen Keating, a spokeswoman for Barnes & Noble wouldn't reveal how many of these devices have been pre-ordered, but she did say, "Demand for the product in our stores and online has surpassed our expectations." She also noted, "We are working hard to meet demand for the holidays."

Barnes & Noble Inc. (NYSE: BKS) recently announced an electronic e-reader to compete with the likes of the Amazon.com's (NASDAQ: AMZN) Kindle and Sony Corp.'s (NYSE: SNE) Reader.

In perfect holiday fashion, the e-reader is set to become the "must have" gadget for the gift-giving season almost upon us. The newer Nook device has a small color screen that allows easier content locating (but no keyboard), the ability to "lend" digital books to a friend and built-in wireless internet.

As expected, Barnes & Noble (NYSE: BKS) has announced its entry into the e-reader market. The top bookseller, with green stores all over the country (and, for that matter, my neighborhood) is eager to get a taste of of the success Amazon (NASDAQ: AMZN) has realized with the Kindle.

The Barnes & Noble e-reader, which will be called the Nook, will be available at the company's more than 750 locations in the United States at a price of $259. Essentially, it's coming in at the same spot as the Kindle, which currently owns 60% of the U.S. market.

For retailers, the crucial season is on its way. Blow the Christmas rush, and next year starts off on a miserable foot. Success, of course, also delivers a healthy dose of momentum -- and a little bit of wiggle room, important in what will continue to be a tough economy through at least the first half of next year. For booksellers, now contending with a new variable in the form of digital readers, e-readers will play a major role in defining the winners and losers. So far, it looks like Amazon (NASDAQ: AMZN) is off to a great start, and it will take some genuine innovation for the competition to chip away at its market share.

Barnes & Noble (NYSE: BKS), once the leading names in literary retail, is expected to release its own e-reader this week. It will look a bit like Amazon's Kindle, according to Reuters, but with a touch screen intended to make the reader's experience easier. The price hasn't been disclosed yet, but rumor has it that it'll be higher than the Kindle's $259. BKS is staying mum on its plans in this space. There are others in the space, as well, including IREX Technologies, which is a spinoff of Royal Philips Electronics (NYSE: PHG), Asutek (tk: tk) and a project called FirstPaper that has Hearst behind it.

Best Buy, Inc. (NYSE: BBY) wants to make the U.S. consumer believe that the e-reader is the "must-have" gadget of this holiday season. To that end, the nation's largest consumer electronics retailer has launched a special website (not active yet, apparently) where it will make the e-reader category and associated gadgets headliners of this holiday season's gift giving.

It's more than just Best Buy believing this. Analyst firms like iSuppli are behind the agenda as well. Best Buy's holiday gadget selection will feature more than 120 products priced between $25 and $75, with brands like Sony, Leapfrog and Sharper Image.

When Amazon.com (NASDAQ: AMZN) unveiled the first Kindle e-reading device just under two years ago, many balked at the steep price the device was selling for. After all, who would pay so much for basically a replacement for books and newspapers?

The second iteration, the Kindle DX, was released earlier this year to rave reviews and a slimmer body -- but was still priced at nearly $360. Still think that's too high?

Printers of the world unite! Feeling the squeeze from the likes of Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL), a group of magazine publishers is forming an industrywide joint venture ... for protection.

Led by Time Inc., a division of Time Warner (NYSE: TWX), participating companies would create a digital storefront for their content. In this way, they could peddle their goods without the hefty carve-outs that come with Amazon and Apple deals.

With the Apple (NASDAQ: AAPL) Tablet, newspapers doing what they should have done: thinking about the possible impact to their business and trying to find ways to mitigate it. This comes 15 years after the industry ignored the internet and a decade after it disregarded Google (NASDAQ: GOOG). Of course, unwilling to admit its salient and severe fallibility, the newspaper folks are saying that they don't want the Tablet to destroy print the way the iPod destroyed the music industry.

The newspapers are apparently worried that circulation could plunge, driving profits through the floor and jeopardizing their abilities to operate. They are concerned that properties like the New York Times Co.'s (NYSE: NYT) Boston Globe could wind up selling for a single-digit percentage of the original purchase price.

By 2013, more than $4 billion will be spent on smartphone applications, according to a new study by the Yankee Group ... and the estimate is said to be conservative. With the average owner of one of these devices downloading around 20 applications a year, it's obvious that this market is getting ready to pop. Currently, only $343 million is spent in this space.

An increase in the number of smartphone applications available -- for Apple's (NASDAQ: AAPL) iPhone, Reasearch in Motion's (NASDAQ: RIMM) Blackberry, and Google's (NASDAQ: GOOG) Android -- and rising prices for these applications will push the total size of this market higher.

We've all heard of Amazon.com's (NASDAQ: AMZN) Kindle -- perhaps you've even seen it in the flesh. It's portable, well-lit, and comes equipped with wireless technology so a user can download a new novel on the fly.

The competing device, Sony Corp.'s (NYSE: SNE) e-reader ... well, it's portable and well-lit. But if you run out of reading material and you're away from home, too bad. Until now.

Rumors continue to swirl that Sony is not far off from unveiling a wireless version of its Reader. The company's e-reader group has extended an invitation to reporters for a meeting on August 25. Could a wireless announcement be in the offing?

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

The digital revolution? The frugalista movement? Social networking? Or As-seen-on-TV products? 2008 has changed the landscape of how we recreate, communicate, shop, and dream. What product would you consider the Best Breakout Product of 2008?

Amazon Kindle

Amazon's (NASDAQ: AMZN) Kindle is not the first attempt to replace the paper book with an electronic reader, but it has succeeded (and how -- even now, over a year since its launch, the wait time for a new unit is a couple of months) where others failed for several reasons. The first is the reading experience. The Kindle's cutting-edge electronic paper technology provides crisp, clean print in any light conditions. The device is thin and light enough to carry anywhere, and can store hundreds of books at your fingertips.

The second reason for its success is the access to a huge library of literature, which can be accessed via a built-in wireless link (no computer needed) through the Sprint cell phone system. Virtually all new books are available in Kindle format, and many, many others (190,000 and counting). Top newspapers such as the New York Times also offer Kindle subscriptions, and schools are beginning to adopt it as the platform for electronic versions of textbooks. In the race to lead the transition to electronic books, Amazon's Kindle has broken free of the pack.

In a rather nostalgic touch (it seems), Engadget is reporting that Amazon will be releasing an "e-book" reader soon. This makes sense as many industry pundits have predicted that the printed paperback and other related books may soon become a thing of the past as electronic versions of these same books become more popular. Why shouldn't they? The cost to distribute an electronic book is virtually nil, just slight bandwidth, and the more two-way interaction and consumer relationship building that can happen, the better.

But will Amazon itself be pushing publishers to release new books in both a paper format and an electronic format? If so look to Amazon to have the market cornered for at least for a little while on the e-book universe. Sure there are already e-book products from several companies, and there have been for years (Franklin and Sony come to mind). But the standards aren't there, the power of a bookseller like Amazon.com isn't there, and the publishers aren't yet there. Amazon's sheer scale in the bookselling world could probably make this happen, yes?

The Amazon "Kindle" -- as it's being called -- looks like something from 1989, but alas, this is probably just a prototype design. Or, maybe Amazon is going retro to make the transition from old, worn paperbacks to e-book reading less and less of a medium transition. With built-in EV-DO wireless (the 3G tech used by Verizon Wireless and Sprint Nextel), Amazon must want it's e-book consumers to have easy access to the upcoming crop of e-books.

Just connect to Amazon.com over the wireless Internet and choose your reading poison. Interesting stuff here, and if Amazon can be successful with a large-scale reading environment transition like this it'll be a pioneer yet again. As an AMZN shareholder, what are your thoughts? Does this have a chance at succeeding if Amazon can tilt the reading paradigm in its favor?