Easy Answer: It depends on how much you read and where you get your paper books.
As with a lot of environmental show-downs, clear winners are tough to come by. Borrowing books from the library is probably the most environmentally friendly way to get your reading done--but what if you're a book buyer? Is it better to purchase a Kindle or to keep on buying your Jonathan Franzen or Nicholas Sparks novels?
According to the Cleantech Group, the "carbon emitted in the lifecycle of a Kindle is fully offset after the first year of use." That is assuming you're a big reader. The Cleantech data says the environmental impact of a Kindle is offset at the point that you've bought about 23 e-books (instead of paper books).
The study makes another assumption; that is that publishers will print fewer paper copies of books in response to e-book sales. It's not uncommon for unsold books to be returned to the publisher and destroyed.
You can find the entire Cleantech report here:
Photo credit: Flickr user Paul Watson.