Hi Steve
I've wondered about the same topic myself, and I've found this article helpful:
http://www.humanfactors.com/downloads/nov02.asp
The article is a bit academic, but here's the conclusion: "Users tend to read faster if the line lengths are longer (up to 10 inches). If the line lengths are too short (2.5 inches or less) it may impede rapid reading. Finally, users tend to prefer lines that are moderately long (4 to 5 inches)."
At our agency, we used to have a rule of thumb saying that 45 characters was approximately the right width. However, as many sites are elastic/scalable, it's becoming increasingly hard to control the text width.
Maybe someone's got a comment on that?
Regards
Morten