Here's a link to a story from The New Scientist on ethanol. It addresses some of the downsides of ethanol such as the trade off among ethanol, food, and forest as well as the environmental impact of ethanol.
In addition to that story, another reason I don't see ethanol as a viable long term energy alternative, as technology currently stands and the fact that the U.S. can't grow sugar cane like Brazil, is the issue of water. Major growth cities are already worried about the the availability of water in the future. Ethanol would draw more water usage into agricultural uses, diverting it from direct human consumption. The EPA puts the percentage of U.S. water consumption in irrigation at 81%. If water for residential or industrial uses is going to come from anywhere, it's going to come from irrigation. Now whenever someone finds a relatively lower cost method of desalinization, and it will happen eventually, the water issue may not be a problem.
Or the development of water markets and enhanced private property rights in water would also be extremely helpful. If water had a market price it could be directed to its most valued use. See Terry L. Anderson's Water Crisis: Ending the Policy Drought (which you can get online for $2.00).