post for May 11, 2011, for updated information on the ISBN requirements for various e-book distributors. The links for Bowker and the Canadian government are still valid.]
Currently reading - Percy Jackson and the Olympians: The Sea of Monsters by Rick Riordan
Out of the distribution channels, I narrowed my choices down to Amazon and Barnes & Noble for their respective customer reach and Smashwords so I can do coupons for my loyal blog readers. (To know what you're getting in to, go read the the first chapter of Zombie Love.)
Now, I can distribute an e-book through Amazon and Smashwords without an ISBN, but not through Barnes & Noble or anyone else I've discovered so far. And Barnes & Noble is one of my prime choices, so I need an ISBN. (I've been seriously studying CreateSpace, Amazon's paper independent publishing arm. It looks to be much cheaper than Lulu, but CreateSpace also requires an ISBN.)
"What's an ISBN?" you ask.
ISBN stands for International Standard Book Number, a unique identifier for every book, paper or digital, that goes through normal retail and library chains. If you go through a regular publisher like Ellora's Cave or St. Martin's Press, the folks at the publishing company handle the ISBN for you. If you indie publish and you want to distribute through certain channels, you'll need to buy your own.
In the U.S., an ISBN can only be purchased through Bowker. However, Canadians can get them free from the Canadian government. (You lucky dogs!)
A single ISBN costs $125, but a block of 10 starts at $250 up to $1000 for a block of 1000. If you're going to publish more than one book, or multiple versions of one book, it's much cheaper to buy blocks. Also, different e-book formats are supposed to have their own individual ISBNs.
As I said, certain channels will accept your e-book without an ISBN, but if you're looking long-term distribution into most retail outlets and libraries, an ISBN assigned to your book will be in your best interest.
Once you've bought a block and assigned the number to your book, you'll need to register the ISBN with Books-In-Print. Morris Rosenthal has an excellent blog on self-publishing, and I suggest you read his post on dealing with Bowker.
It sounds complicated, but it's not hard. Isn't administrative stuff fun?