Judging from two reader comments from Chicago and DC, sites like "Squink" are making inroads in larger metro markets.
And this morning, Grand Haven Tribune Publisher Paul Bedient tells me: "After 72 hours, we’ve served up over 16,500 pages to about 850 visitors."
He's thinking it'll be a sticky site. Of course, 72 hours is early, but those are good stats for starters. It must help when you own a newspaper to promote your site too :)