Library Ideas was at PLA 2012 this week, and they had their 2 pay-per-use services on display.
Freading initially caught my eye because it's not your usual library ebook service. Rather than sell titles, Freading lets libraries pay a rental fee per checkout. The cost is $2, $1 or $.50, depending on the age of the book ($2 for the first 6 months after release, and $.50 after the book is 2 years old).
Library Ideas currently offers 20 thousand titles via Freading, and they expect to have that up to 50 thousand by the end of the year. The ebooks can be read via Freading's iOS and Android apps, and they can also be transferred to the Nook and other ereaders.
And like their competition, Library Ideas says that they contacted Amazon about support for the Kindle. They did not get a response.
So what do I think? TBH, I'm still waiting to see what librarians say about it. The service is only 6 months old, so it's a little early to render a verdict. But it doesn't look to me like Freading will be one of the main contenders in this market. But I also don't think Library Ideas is planning that; this feels like a supplemental service.