Caveat: I am no expert. But having perused writers' forums actively for 8 months as I struggled to get my work known ( www.pauldaytonscifi.com
hehe) I've learned a lot as to why now is possibly the hardest time ever to get anything published, and why more and more people are going the new self pub'd or ebook route.
The economy has severely affected the publishing industry. Yes, you still see book stores busy with customers (who are purchasing much more carefully now, by the way), and although sales are down, the problem isn't really the consumer.
The issue is that every major organization is cutting down. Less T.V. shows, shorter seasons, fewer writers, fewer journalists, fewer, fewer, fewer. The result is of course a huge group of jobless, professional writers, journalists, T.V. show writers and so on, sitting at home twiddling their thumbs. Many of them turn to what they do best and write the novel that has been sitting in their heads for x number of years but never had time to write, until now.
Worse yet, the average Joe/Jane Doe reader is also laid off, and as they get pogey, suddenly get the idea that they can write too, and wouldn't it be a great idea to get some extra income?
Result - slushpiles are now huge. Great MSs get missed because there simply isn't the time or the manpower to go through them all. I've found about half the pub houses haven't sent me a reply to my query, and of those that did, it's the standard reply that has me guessing they haven't even read the first page of my MS.
What IS happening at pub houses:
They stick with known, successful writers, which are less of a gamble. They stick with known formulas - is your book over 100,000 words? Does it have vampires? Are you unpublished?... REJECTED
Publishing an ebook is getting easier and easier, even for major online retailers such as Barnes and Noble.
This also comes with a caveat. Because publishing an ebook is now so easy, the list of crappy ebooks out there is huge and growing. So, an author has two choices in this matter:
Send out queries AFTER your MS is as good as it will ever be, or
publish it in ebook format, and ADVERTISE, PROMOTE, BEG AND PLEAD.
Tough, isn't it?