The Google Book Settlement, in a nutshell
As a result of some very fancy legal footwork, and with the co-operation of a US authors' organisation and the Association of American Publishers (these bodies were last heard of suing Google for copyright infringement!) Google is trying to change the legal rights and modify the contracts of virtually every author, literary estate and publisher in the world, without their explicit agreement, to award itself unprecedented rights to reproduce their work in the United States.
The stuff about 'orphans' is mostly smokescreen. Most of the books whose rights-holders really can't be traced are of very little interest to anyone. The real truth is that clearing copyrights individually with the rights-holders in the time-honoured (and legal) way is too expensive and time-consuming for Google. Google is hungry for great quantities of free or cheap content against which to post ads. I think that that is what this is mainly about, at least from Google's point of view.
Authors (and their heirs or executors) have till 5 September to opt out of the Google Book Settlement; otherwise, assuming the court accepts the settlement agreement, they will find themselves bound in what amounts to a perpetual contract of great length and mind-numbing complexity, containing many clauses favourable to Google.
After 5 September, if the settlement goes through, they will have to register with a new outfit called the Book Rights Registry in order to keep control of their US rights. In the case of those who fail to do so (most likely because they have not understood what is happening) any money earned by the use of their work will be divided between Google, the Book Rights Registry and the rights-holders who have registered. (Some may trickle down to charities.) The proposal to give rights-holders who sign up a share of the money earned by the books of rights-holders who haven't is one of a number of features of the scheme that has attracted criticism.
But the root evil of the scheme is the universal opt-in of all owners (or licensers) of copyrights. This is against international law and agreements on intellectual property.
I may add that even authors who have never published in the States are being caught in this net. Google is digitising indiscriminately, and plans to go on doing so.