One of the best books about service design thinking over the last number of years is Stickdorn and Schneider's "This is Service Design Thinking". It's the book that I use as my text anytime I teach service design. It does a pretty good job of describing what makes a service different from physical products and also of highlighting the various tools at the disposal of the service designer. If I had one criticism is that it fails to give any in-depth examples of some of the tools being used. This is inevitable given the breadth of tools available to the service designer/design thinker.
DESIS Lab Melbourne (Design for Social Innovation and Sustainability) invited Marc Stickdorn to discuss his book in November 2011. The presentation provides a good background to Service Design and the book.