definition of incident
SO book describes incident in a strange manner. The definition is incorrect and contains a short description of the process as well. The process description contain also events. It looks like the author did not know or understand what the V2 definition of incident is and forgot to edit the definition.
The box on page 46 states:
In ITIL terminology, an ‘incident’ is defined as:
An unplanned interruption to an IT service or
reduction in the quality of an IT service. Failure of a
configuration item that has not yet impacted service
is also an incident, for example failure of one disk
from a mirror set.
Incident Management is the process for dealing with
all incidents; this can include failures, questions or
queries reported by the users (usually via a telephone
call to the Service Desk), by technical staff, or
automatically detected and reported by event
monitoring tools.
Made in New Zealand 
Comments
curious amalgam of Incident, Event and Request
You're right, it does appear to be a curious amalgam of Incident, Event and Request.
"unplanned interruption": Incident
"Failure of a configuration item that has not yet impacted service": Event
"questions or queries": Request
How did that one get past all the reviewers? The Two Davids are not silly and are highly experienced in ITIL, so this has me stumped.
Other curiosa
Good question. I have been really suprised there has not been more criticism against V3. I suppose a lot of people have only listened presentations about V3 but have not read the books.
There are more strange things in the books. Have you noticed these:
the new name for Configuration Management, SACM appears only in the process itself. Not even the authors of other chapters in the same book are aware of the name change.
ITSCM has a strategy dimension but it is not discussed in the strategy book
Transition planning defines releace policy, which makes sense. Release management also defines release policy which makes less sense.
Nobody refers to Evaluation process in any other process.
Application Management process is fully descibed under the organization but it is not mentionoed as a process.
Reporting process description is one page long.
CSI speak nearly only of measurement and analysis. The real challenge is the improvement.
My guess is that the whole project went wrong and in the end they did not have time to review or coordinate the content.
Br Aale Roos
An impressive piece of skepticism
Wow, this is an impressive list. You are shortlisted for the IT Skeptic's The Grand Sagan Candle for IT Skepticism for 2008!
I'll put all these in BOKKED