A very good piece here in Forbes magazine about the ethanol rush and how it ain't what it used to be. I've appended a couple of paragraphs below which concisely put the for and against case;

"Despite the clamor to prop up gas prices, ethanol investors like to boast that the corn-based fuel would be profitable at $35 oil--even absent the subsidies they benefit from. It’s hard to judge how ethanol would fare against gas under various market conditions because ethanol demand is currently being driven by the federal mandate and the phase-out of the gasoline additive MTBE, which refiners have scurried to replace with the corn-based fuel.

But rosy predictions of ethanol's viability often ignore the volatility in the price of corn and natural gas, which fuels most ethanol plants. In fact, it's not far-fetched to imagine a perfect storm in which low-priced oil coincides with climbing natural gas prices just as a drought hits the Midwest, ravaging the corn crop".
The figures on what becomes economically viable at what oil price incidentally are not universally agreed upon. I was just re-reading a report on the oil industry published by The Economist magazine (April 22nd 2006, page 82) and they used these figures from Cambridge Energy Research Associates and their own data sources;

$80 - Biodiesel
$64 - US corn-based ethanol
$50 - Shale oil
$40 - Tar sands; Brazilian can-based ethanol; gas-to-liquids ; coal-to-liquids
$20 - Conventional oil