I liked Zite when I reported on it earlier this month. In fact, I use it every day as a great news and information discovery app on my iPad. The app is free, and for now, still in the App Store with very strong user ratings.
There's no love, however, from publishers that claim Zite infringes copyright. A group including Time Inc, Dow Jones, The Washington Post, The Associated Press and others have sent Zite a cease and desist letter claiming that intellectual property is being misappropriated, and the publishers have asked Zite to "immediately stop doing so." The letters goes on to say that Zite, "by systematically reformatting, republishing and redistributing our original content on a mass commercial scale without our permission in your iPad application, Zite directly and adversely impacts our businesses."
The publishers, of course, have a valid point. Zite articles aren't direct linked, but it is an option within each story. Publishers can request direct links, and some have. The Zite developers may have to change the app to always supply direct links to articles, rather than reformat them inside the app.