Barry Schwartz author of The Paradox of Choice: Why More Is Less recently gave a presentation at Google on The Paradox of Choice. He has lots of great statistics and examples. You can watch the video on Google Video.
Here are some notes from the video:
Effects of too much choice
Capability Vs Usability tradeoff - Capability seams more important at first but in practice usability is more important.
Via: Greg Linden
Gall's Law is a rule of thumb for system design from John Gall's book Systemantics: How Systems Really Work and How They Fail:
A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.
Via: The O'Reilly Radar.
Here's another article from fast company called The Beauty of Simplicity:
It is innovation's biggest paradox: We demand more and more from the stuff in our lives -- more features, more function, more power -- and yet we also increasingly demand that it be easy to use. And, in an Escher-like twist, the technology that's simplest to use is also, often, the most difficult to create.