See Wired’s Six Ethanol Myths.

Personally, I find some of this less than authoritative. For example, the Natural Resources Defense Council is hardly an ideal economic referee if you ask me.

Update: This reader is even more unimpressed:

Jonah – Vinod Khosla is hardly an unbiased source. The guy (one of the founders of Sun Micro) has millions of dollars tied up in – wait for it – ethanol investments. He’s just waiting for the payoff. He reminds me of the monorail salesman from The Simpsons.
He’s playing a little fast and loose with the “facts” (to say nothing of the language) in his article, which is pretty standard for him. I do chuckle a bit at things like “Prices spiked higher recently because oil companies mismanaged the switch to ethanol as a replacement for the environmentally disastrous additive MBTE.” Sigh. Sure, Vinod, whatever you say.
A great energy blogger at http://i-r-squared.blogspot.com/ has gone back and forth with Vinod on a number of occasions (see http://i-r-squared.blogspot.com/2006/07/vinod-khosla-debunked.html, for example).