From an announcement on Amazon’s website:

First, we are making Kindle newspapers and magazines readable on our free Kindle apps, so you can always read Kindle periodicals even if you don’t have your Kindle with you or don’t yet own a Kindle. […] Second, later this year, we will be introducing lending for Kindle, a new feature that lets you loan your Kindle books to other Kindle device or Kindle app users. Each book can be lent once for a loan period of 14-days and the lender cannot read the book during the loan period. Additionally, not all e-books will be lendable – this is solely up to the publisher or rights holder, who determines which titles are enabled for lending.

This is something that needs to happen for e-books to be successful. The only addition I would love to see is more lenient lending periods. If I lend a book to a friend I’m not going to tell them that it must be returned in two weeks. They’ll return it when they are finished reading or have read enough to decide whether or not they will purchase it themselves.