Naomi Novik recently gave a great interview about how fan fiction is part of literary history ( via i09). A couple of times at AussieCon 4, Cory Doctorow mentioned his own well-known stance on fan fiction:
"And once readers model a character, it's only natural that readers will take pleasure in imagining what that character might do offstage, to noodle around with it. This isn't disrespect: it's active reading." (Locus Magazine)
I'll admit, I don't really read a lot of fan fiction. I read some of the fiction friends write, but I'm having enough trouble keeping up with the arrivals of comics, fairy tales, novels and such that then pile up. Nonetheless, I get frustrated with myself. I believe in fan fiction. Why don't I read more of it? Why do I let it reside at the bottom of the 'to read' pile? For that matter, why don't I write more?
Well, in terms of the latter, time is the easy answer. I did once write fan fiction, but it was scribbled into the back of geography notebooks and passed around friends. I went to high school before the Internet was around. But writing with established characters provided fascinating opportunities to explore how we all related to them and, indeed, opportunities to write for known audiences. I could use what I knew about my friends' interests to appropriately tweak my stories. As a writer, it provided vital practice in 'knowing one's audience.' Today's fan fiction writers are writing mostly to fan bases. They have to grapple with factions and theories and rumours in the fan community, not simply with the 'canonical' material. This offers a fascinating insight into how writers and readers engage and debate story.
If you're interested in the topic at an academic level, a great place to start is Henry Jenkins' Textual Poachers.
Incidentally, over at Silk for Caldé, there's a terrific post on AussieCon 4.