An interesting trend we're seeing is business incubators offering coworking options, and at the same time coworking facilities are offering incubator-like services.
The overlap is being driven by the growing number of early stage companies that are boostrapping, and/or distributed, and/or virtual, and/or outsource almost everything. These firms do not need or want to incur the costs associated with traditional office space.
They often also don't need (or want to pay for) the full range of services traditionally offered by business incubators.
Business incubators have noticed this shift and are starting to offer "incubator-light" spaces that look a lot like coworking spaces. An example is Seedspace, part of Georgia Tech's Advanced Technology Development Center.
At the same time, coworking facilities are catering to early stage companies and offering incubator-like services. An example is Parisoma. You simply can't read their blog without thinking it is an incubator.
The Hub is another example of a coworking space that is also an incubator - or an incubator that is also a coworking space. The differences and definitions of these types of spaces are becoming increasingly blurred.