ReadSmart, a division of Language Technologies, has yet to ink a deal with a major publisher (CEO Lee H. Berendt said the company is in talks, though he wouldn’t say with whom), but the company’s e-book technology highlights an important issue in the ongoing discussion about the future of books. Caught between dreams of e-readers that hold thousands of books and weigh less than a sheet of paper and lamentations over the demise of the beloved book object, publishing continues its mad dash toward the digital future. Both the eager and the mournful have good points: there’s much to be lost—that warm feeling of holding a beautifully designed, well-made book in your hands, the trophy of a completed project sitting proudly on your shelf—and much to be gained, such as a lighter bag.

Throughout the unfolding discussions about how to best turn books into files, the question of how to make e-books look, work and feel like paper books keeps coming up. The E-Ink screen on a standalone e-reader is one answer: a digital screen with ink that rearranges itself when you turn the page—what could be more like paper except, well, paper? Both the Sony Reader and the Kindle are about the size of a book, and the Sony device comes bound to a leather wallet, which, when held open between your thumb and fingers, approximates the feel of a hardcover. Of course, there’s another camp that believes that once we get used to digital reading and its myriad conveniences, we’ll forget all about the old-fashioned book, just like we forgot about the cassette tape. Makers of e-readers for the iPhone, iPod Touch, Blackberry and other smart phones are battling it out in this camp’s wars: Lexcycle with its Stanza app and Fictionwise with eReader are evangelists of the ePub e-book, with its reflowable format to fit tomorrow’s screen today—though in an iPhone’s little window, they seem, to many, like mere ghosts of books.

But there’s no denying the excitement about reading on smart phones, especially the iPhone. In a few months, when Apple releases version 3.0 of its iPhone OS, enabling app developers to conduct transactions within their apps rather than through the phone’s browsers, things will only continue to heat up, as e-readers will be able to contain fully functioning e-bookstores. The iPhone brings new urgency to the question of what happens to the book object, or at least to its trappings, such as carefully laid-out pages designed to correspond, however obliquely, to the mood of the text itself. Does the iPhone sound the death knell for typesetting, for Bembo, Perpetua and the other fonts we hardly knew we loved? ReadSmart, for one, thinks otherwise.

Basically, ReadSmart’s proprietary e-book format does two things. The first is re-create the design of the original book, including typeface, drop caps and even illustrations, in a format sized specifically for the iPhone screen, showing roughly a third of a printed page at a time. You won’t be able to find a ReadSmart book on any E-Ink device, but the book you’ll see will look more like a print book than anything else on the iPhone. The company will be debuting a few public-domain titles in the Apple app store in the next few weeks, hoping for viral promotion to drum up some business. Berendt said he’s looking at other devices, but focusing on the iPhone for now. ReadSmart is able to make the text searchable and can handle popular file formats, but what the company is counting on most is that readers will want to see publishers’ design efforts reproduced on their iPhones.

The second, equally compelling, though perhaps less pressing, aspect of ReadSmart’s technology has to do with reading comprehension and what the company calls “phrase-based spacing.” ReadSmart’s system can format a book so that lines break at the ends of phrases, and can even almost invisibly widen or narrow particular letters, depending on how much information they convey in a specific word, thus dramatically increasing reading comprehension (the company has done studies to prove it) and reducing composition snags like orphans and widows. ReadSmart has laid out several print books for Penguin and accomplished some impressive things, composition-wise, but that’s a topic for another day. While ReadSmart may not have all the answers to the pressing questions about the future of books, both in print and on screen, the company does offer new options.