RedefiningLiteracy
We can think of literacy as the ability to read and write, or we can think of it as how well one knows this specific area we're speaking about.
The internet gives a new look at the english (and other) languages. Shortcuts and abbreviations become the norm when chatting online. Essentially the internet has created a subdivision for the English language. Some people may be able to work backwards to figure out what some abbreviations mean and sometimes it's simple enough to figure out the origin of the word. The problem with chat-speak and acronyms and abbreviations with speaking with each other online in blogs, chatrooms, twitter and facebook is the unfortunate side-affect of increasingly bad grammar, sentence structure and spelling among the youth. The internet has contributed to some decline in the english language, but it has also begun to form an entirely new language simultaneously.
There's also the meaning of literacy in the ability to understand a certain field well. You can have a strong ability in reading every day material but when you find yourself unable to understand something complex, you may be able to read the words but you are unable to comprehend the meaning. You may walk away with an overall idea of what you read, but any specifics is lost to you. This would be another form of illiteracy that many people have probably experienced.
YamiBlanford
I think literacy needs to be defined more specifically than "the ability to read and write". With such a broad definition, someone who can read Sally, Dick, and Jane, but can't read a mass market mystery novel, is literate; someone who can read a mass market mystery novel but not War and Peace is literate; someone who can read War and Peace but not Spinoza's Ethics is literate. Where do you drawn the literate line? I wouldn't consider, for example, someone who can only read TV Guide as being literate.
It seems to me that Internet English, like other forms of English, is simply a regional dialect that those who live in or move into the region need to learn, just like any other region. For example, Scottish English is nearly incomprehensible to me, but that does not make it any less English, and if I moved to Scotland and learned the dialect, I would probably find that it has the information carrying capacity of any other kind of English. Learning to deal with the grammar and vocabulary of Internet English, then, is no different than learning to deal with any other dialect. So it isn't the dialect of the Internet that concerns me as much as it is the information carrying capacity of some of the tools used to communicate it. I worry about the predominance of Twitter and its limiting effect on language. I'm sure that when the telegraph first came into operation, some people worried about its limiting effects as well. The telegraph became obsolete and I think that other systems of transmission that limit language, such as Twitter, will probably (maybe hopefully) become obsolete as well.
KevinMcColley