That all being said, I share your dream of one day owning my own bookstore (where I'll of course become enormously wealthy simply based on my awesome taste in books).

I love non-chain bookstores. I want them to find a way to survive other than by relying on publishers. (Like, say, relying on their customers.) That would make them truly independent, and I think that would be a good thing all around.

As to how they might do this, I see a nexus of two needs. First, bookstore owners are generally well informed about available product — both in popular categories and in terms of critical appeal. This positions them to meet the filtering needs of the overwhelmed customer. Second, bookstores need to become the point of purchase (or ordering) of POD books and wifi-available digital content, so that customers can land the titles they want in the format they want with minimal hassle.

Whether the Espresso Book Machine is the ticket or not for POD, I cannot imagine an independent bookstore of the future that is not helping customers deal with POD and digital download issues.

If bookstores truly embrace the filtering problem, this also provides a back-door way for bookstores to continue to pocket money from publishers who wish to pay to be put on 'favorite' lists. There will be all sorts of squawking about this, but in the end the money will move behind the scenes — as it does in bookstores and grocery stores and every other kind of store where proximity to customers equals an increased chance at a sale.

I think there are a lot of possibilities, but a lot of testing needs to be done in the marketplace. The biggest hurdle right now seems to be the rapidly evolving technology, which makes investment in any particular solution risky. It reminds me of the early computer game days, when betting on the wrong video card could kill your otherwise capable title.

PS: I've copied your link here and deleted the second comment, and included their other links:
http://www.farleysbookshop.com/NASApp/store/Ind…
http://farleysbookshop.blogspot.com/
http://www.facebook.com/pages/New-Hope-PA/Farle…
http://twitter.com/Farleys

And you've put your finger on it with bookstores – expertise and knowledge (the kind of knowledge that doesn't just come from a cookie-based algorithm but from empathy, conversation, and a shared passion). I want to give a shout out to two places.

First up, the Albion Beatnik in Oxford – it's a shop that specialises in books about jazz and Beat Poetry.

Second, what promises to be a great new venture, To @Hell With Books in Woburn Walk, London
http://www.tohellwithpublishing.com/to-hell-wit…
- opening tomorrow. It's set up by the guys from To Hell With Publishing (see @tohellwithemma on twitter), who specialise in first novelists directly subbing literary fiction. The shop will be devoted to literary fiction, special editions, journals, novellas, and chapbooks – a shop to get SERIOOUSLY excited about.