Well, for a discussion by two MIT scientists on the development of cellulosic ethanol:
MIT experts foresee sustainable ethanol production - MIT News Office. This is large scale they are talking about - there are already a couple small plants experimenting with this type of ethanol. Likewise, there are several closed system plants being built in the midwest. A good book on this can be found here:
Great New Books that Are a Must Read: Sustainable Ethanol: The Future of Energy Production?