A new book, Word Origins … and How We Know Them: Etymology for Everyone by Anatoly Liberman, should help dispel some myths about how words arise. Its publisher, Oxford University Press, says:
Word Origins is the only guide to the science and process of etymology for the layperson. This funny, charming, and conversational book not only tells the known origins of hundreds of words, but also shows how their origins were determined. Liberman, an internationall acclaimed etymologist, takes the reader by the hand and explains the many ways that English words can be made, and the many ways in which etymologists try to unearth the origins of words.
They add “For the past seventeen years, he has been working on a new etymological dictionary of English,” and I certainly look forward to seeing the finished product; meanwhile, I’ll have to check out his book, which Grant Barrett was kind enough to mention in a comment to this entry (he linked to Nathan Bierma’s Chicago Tribune review, apparently part of Bierma’s regular On Language column—I’m glad to know somebody other than Safire has one!
Addendum. Thanks to a comment by The Cataloger, I learn that Bierma has a blog.
Update (Oct. 2009). I regret to report that Bierma’s column ended last year; the last one I can find is dated September 23, 2008.