Does the Instapaper iPhone app do the stripping, or does Instapaper serve the stripped version? I'd say the former is illegal, and the latter is legal, though it'd be nice if a publisher could opt out and/or provide their own stripped down version that the app would use.

It's possible that I'm wrong, but I'd appreciate if you could point to the legal precedent that establishes this. The general rule is that making a copy of any copyright work is forbidden, unless you have a license or it's fair use.

You are right that ripping a CD (that you own?) to MP3 for personal use is covered as fair use. This was established relatively recently in RIAA vs Diamond Multimedia[1], a case that primarily decided that the Rio was legal because it _wasn't_ a digital music recorder. But it also stated "the Rio's operation is entirely consistent with the Act's main purpose -- the facilitation of personal use" and that "Such copying is paradigmatic noncommercial personal use entirely consistent with the purposes of the Act".

But simply transforming a musical recording into a different format isn't quite a parallel example, as the goal is usually to make a complete copy. I think a closer parallel would be recording a television show with the ads clipped out. While 'time-shifting' is held to be legal (under Sony vs Universal), if you save a version with advertisements removed, you may well have created a derivative work.

I think Tivo is probably a pretty close example. While I don't think there has been a precedent setting case yet, it's probably worth noting that Tivo does not allow its users to automatically skip advertisements in the shows it records, despite the fact that this would be a popular feature with users. They no longer even have a button on the remote to allow the ads to be skipped easily.

For example, a law review article[2] titled "The TiVo Question: Does Skipping Commercials Violate Copyright Law?" reaches this simple conclusion: "Using a DVR to skip television advertisements violates copyright law, and DVR manufacturers should be contributorily liable. By providing a means for television viewers to skip advertisements, DVR manufacturers deny television networks the intended incentive for their creative expression--advertising revenues."

I've only skimmed it, but the article provides a lot of useful background on the relevant arguments and case law.

[1] http://www.virtualrecordings.com/diamond.htm

[2] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=901062