I'll make this post brief – this link to the e-news source, Wired, says it all, and I don't want to be too repetitive. Suffice it to say that some rather high octane writers have come out against the Google settlement, in particular the role the Authors Guild had in blessing it.
The Authors Guild's rationale here is a bit like that for Congress' bank bail-out. It's hoping for a long-term solution to the paper-to-digital transition, positioning writers for future digital dollars.
Will it work? The above link(s) will leave you informed. I hope you'll read this and make your opinions known, whether here or in more powerful venues.