Just finished reading "The Long Tail - How Endless Choice is Creating Unlimited Demand" by Chris Anderson. In summary, the long tail is about selling small volumes of a vast variety of items instead of large volumes of a small number of "hits". This possible when the cost of distribution to geographically distant customers is low and the cost of storage for stock is not a concern (eg, intellectual property in electronic format, JIT manufacture). Popular companies capitalising on the long tail include eBay, Amazon, Google Adwords and Lulu.
The book has a lot of interesting stories and statistics but tends to repeat itself often. The long tail idea is probably not new to most readers these days, and I think if you're familiar with Amazon, there's little that comes as a surprise. However, I did find an interesting section in the book about the tyranny of choice. Anderson suggests that choice is good, customers want choice, and choice is only a problem if you don't know what to choose to suit your taste. Hence, an important part of a long tail business is helping people find what they want (ie, filter out noise) in all the vast array of choices. He suggests using user reviews, rankings, sorting etc as means to help people find the "best" choice for them. I also hadn't come across Lulu before - looks worth checking out, a site for mini self-publishing.