Burning biomass with coal to reduce carbon dioxide emissions at power plants could yeild enviornmental benefits. It at least has the benefit of using minimal energy to process the biomass before burning.
According to Earth2Tech blog
A Polish coal plant, which will cofire biomass (burn biomass at the same time as coal) to help reduce its emissions by 25% compared with the country’s current coal plants, is due to come online in 2009. A major Polish power group, Poludniowy Koncern Energetyczny, estimates its total cost at €500 million ($735 million
This is exactly the dilemma of most ethanol-based biofuels, it makes some difference but probably not much overall. (like jumping from the 20th instead of the 36th floor of a building you’re less likely to die, but not much). Much better to work hard at reducing demand through greatly increased efficiency of electrical equipment.