After a couple of years of reading the SDMB, here’s a thread that is finally getting me to open my big mouth. 
DaLovinDJ wrote:
I’ve been considering the question of transportation to orbit for a few years now, and one of the main obstacles to large-scale systems like a Skyhook (space elevator) is that the demand for its capabilities does not yet exist. Currently, there is a market for launching something on the order of 100 tons of stuff to orbit per year. The Skyhook mentioned in the article (which is not possibly going to be built in 6 or even 15 years) could put up thousands to hundreds of thousands of tons per year. Until you can prove (or reasonably suggest) a demand for such throughput, no rational financier will put up the money to build such a project. I haven’t seen the business plan mentioned in the article, but the business plans of most advanced space launch concepts tend to be simplistic and unrealistic. Which is unfortunate and a bit depressing, because so many of us want to go. But one of the problems is of the chicken and egg nature: There’s not a high demand for putting stuff in orbit (partially because of the high cost of getting to orbit), and without a proven demand, no one will spend the money to reduce the cost of getting to orbit.
(Note that I’m mostly ignoring government-sponsored work, but I do so on purpose: I don’t have much hope that anything good will come out of that sector.)
Unfortunately, given the events of Sept. 11, the likelihood of such a mega-project being built has gone down even further, I think. If people are scared of building skyscrapers that are potential terrorist targets, who wants to build something taller than the sky itself?
As far as technical questions go: As others stated, the tether would mostly fall down, not wrap around the earth (although part of it would stay in orbit, and who knows what might happen to it over the course of decades). Some proposals suggest leaving a clear area about 20 miles to the east of the base station in case it does fall. Sorry I don’t have a technical ref handy. I’ll try to dig them out of my files.
Mighty Maximimo is right on the spot – having one ton of millimeter-long ropes is not the same thing as having one ton of a single multi-kilometer long rope. To get the material properties you’d need, each thread in the rope would have to extend the full length (100,000 kilometers or whatever), and no one is coming anywhere near making such a long nanotube. Mixing shorter ropes (eg. millimeter-length) into some kind of composite material has not, to date, produced drastically improved material properties and theory suggests it won’t.
AndrewL wrote:
You don’t have to clear everything out of LEO, but some things would have to go. And it may be possible to have the Skyhook do a little ‘dance’ to boogie itself out of the way of incoming objects (big ones, that is). There are also designs for tethers which would provide a large degree of safety in the case of a micrometeorite strike. Check out Tethers Unlimited, Inc for details on their Hoytether.