On my recent trip to London I was really struck by the ubiquity of the free morning newspapers. They seem to be handed out at every tube stop. A fair number of people on the trains were reading them. I took a couple and found that like the ones proliferating in the States they were definitely newspapers lite.
I've always enjoyed watching reader and newspaper on the tube. Seeing a multipierced young man studiously purusing the Financial Times or someone dressed as if he's off to work in the Foreign Office reluctantly turning his eyes from the page 3 girl when he gets off at the St. James stop. I'd be saddened to think these new papers will be homogenizing this.
A semi-related question, has The Guardian reduced its physical size? I read the hard copy when I'm in London and it seemed smaller this time.