Cory Doctorow has made several of his books available for download, the best being Little Brother. He is finding that free online releases of his books are enhancing the sales of his paper editions, rather than reducing sales.
Other authors are finding the same thing. Old out-of-print books made available for download can revive an author's readership, while new books simultaneously released on the web and in paper can generate more buzz than just the paper edition will.
A little bit more about Little Brother: one of the blurbs sums it up well:
Little Brother is a scarily realistic adventure about how homeland security technology could be abused to wrongfully imprison innocent Americans. A teenage hacker-turned-hero pits himself against the government to fight for his basic freedoms. This book is action-packed with tales of courage, technology, and demonstrations of digital disobedience as the technophile's civil protest.
– Andrew "bunnie" Huang, author of Hacking the Xbox
Check it out.