I'm looking at this exact scenario also. We currently have master-slave replication, and I'm thinking of using mon or something like it to move a virtual IP. The only issue is that I have to ensure that the IP doesn't move back to the "master" after an outage, so that all writes are done to the slave until data can be properly replicated again.
Or, I can use master-master replication (I have the HP MySql book- very good). My only concern is that I have been told that master-master isn't terribly reliable. Any thoughts? If it's stable, then I think that's the way to go for the most seamless failover.
Thanks.