Based on my past experience with Elsevier, I would not be too hopeful. :(

I haven't heard of many nice experiences with Elsevier either, here's hoping they don't mess up such a crucially useful tool.

Well it will surely still work great for managing Elsevier papers.

There will be no favoritism for Elsevier content: http://elsevierconnect.com/elsevier-welcomes-mendeley/

Lots of people have had bad experiences, especially this year. I was one of the people leading the charge against them, in fact. However, they were able to convince me that they really do want us for our openness and they want us to bring that to them. I didn't change my mind easily and I wouldn't expect you to either, all you have to do is consider our track record and continue to hold us up to a exactly the same high standards as before.

Is Zotero [1] a competitor in that space? If so, any idea how they compare?

[1]: http://www.zotero.org/

Zotero has a desktop app in addition to their original Firefox extension. Personally, I've been very happy with it. I have my articles stored in JungleDisk, and everything syncs between mac laptop, windows desktop, and ipad (with ZotPad on the ipad).

There are plenty of reference management tools. Papers, RefWorks, Endnote, JabRef, Zotero, colwiz, readcube, and more. Here's a comparison table at wikipedia (probably not super up-to-date but worth taking a look): http://en.wikipedia.org/wiki/Comparison_of_reference_managem...

I've used both and found Zotero to be miles better.

As I've mentioned before, we see this as a great opportunity to focus on our users and provide an ever better tool and overall resource. More resources will mean more features faster and more attention to key projects like our open API (which will see more attention!)