Here is an article which discusses whether it's a copyright violation to display a book cover on library web sites.
Here is the.effing.librarian's opinion of the broader issue:
For years, librarians have been looking at books and telling people what the book is about: Gettysburg, Battle of, Gettysburg, Pa., 1863 -- Fiction.
And for years, people, including competing authors, have been able to riffle through these collections of book records, or "card catalogs," to see what other authors are publishing. Visiting the stacks to examine these texts is time-consuming, but librarians have been bypassing the originals materials to make this very valuable and useful information freely available to competitors for years.
You can argue that the nature of cataloging is necessary to libraries; but is it, really?
Do libraries really need to decide in which subject category to classify a book for someone to find it? Can't people just browse through all the books to find what they want?
And worse yet, libraries have been uploading these catalogs onto the Internet, thus making all of this copyrighted material available to anyone with Internet access. Shouldn't authors and publishers be protected from this blatant disregard for their intellectual property rights?
Is this legal?
Sure, you can argue fair use, but really, what is fair?