It looks pretty good too: a sort of Pages/iWeb type application that publishes to the iBook store. Apple has done a couple of nice things too; you can test it on your own iPad locally, and they will let us common folk publish to the iTunes store (previously, if you weren't a big publisher, you had to go through some publishing service.)
That's the good news; the bad news? Well apart from the fact that it only supports the iPad (no iPhone) and if you already have an iTunes publisher account, you'll have to create another account to publish books, there is one little fly in the ointment....it will only run under Lion, and I'm still running Snow Leopard! (I have a policy on only upgrading OS's when I get a new machine, or when a software application requires it!)
So great...now I have to spend the weekend installing Lion and getting used to that. I hope Lion doesn't break anything else...
MacWorld: Hands on: iBooks Author effortless to use, but iPad-only