I'm late with this, so you've probably already heard all of this.
Diana Gabaldon is an idiot.
Edit: Gabaldon has taken down the posts and the replies. You can find them as screenshots here.
I've never read any of her books, but her blog is quite well known and I've been there before. Last week she told us her thoughts about fanfiction at some length. Apparently someone is auctioning a piece of fanfiction to help a cancer patient pay her bills. Diana decided to tackle the thorny 'problem' of fanfic. She was against it. Which is fine. Authors who don't like other authors writing fanfic in their worlds usually just state that, and the big fanfiction sites take it down and disallow it going forward. Any writer who wants to risk it usually just writes in a closed group in Live Journal or similar so the author never has to see it and the works in question never circulate publically. Everybody's happy.
But Gabaldon decided to call fanfic writers names and trot out a number of tired tropes - the stories are all about sex; writing about my characters is like seducing my husband and like writing porn about my daughter; it's not very good; writers should shape their own characters. She wasn't always this unimaginative. She has likened writing fanfiction to selling children into "white slavery". That's a new one on me!
She wrote four posts about this, all written in a sort of Usenet text dialect, with multiple _underline_ for italic and [g] for 'grin' or as normal people say, lulz or :). Much of the conversation apparently took place on Compuserve. Compuserve! She sounds like a prim little old lady, and her defenders writing in sounded like clueless pensioners themselves. It's stealing. The writers are lazy. Poor Diana, having to put up with having fans. Many of the fanfic defenders responded in standard Live Journal wank style. More than 1200 people replied (and that's not counting Compuserve, where I did not dare to tread). The overall effect was like Zombie 1992 rearing up and attacking 2004 on its deathbed.
Much of fiction is fanfiction. It just gets a more respectable name. Sometimes the author of the original is dead. Sometimes the writer files off the serial numbers (changes the name of the characters). But most often, the writer is thinking vaguely about something and says to themselves "but what if...?" Then the thoughts come tumbling out and presto, there's the outline of the story. The thing they're thinking vaguely about is often a book, or a film, or a real person. The only difference between that "but what if...?" impulse and a fanficcer's "but what if...?" impulse is that the fanficcer has bought the book and loves it and wants to express what happens next, or what a character did that we didn't see in the book. They take the extra step of making sure they are consistent with something that has gone before (or deliberately deviating from it in some way).
People make up stories all the time. A kid playing with a Batman figure and saving Gotham City is doing fanfiction, and someone in school doodling his favorite manga character is doing fanart. The story of Noah is fanfiction of the story of Gilgamesh. The Greeks wrote large numbers of fanfiction Odysseys..."but what if," they thought, "someone else journeyed home from Troy and different things happened to him?" Shakespeare loved retelling older stories - he wrote fanfiction. People have written Shakespeare fanfiction. Rosenkrantz and Guildernstern are dead, for one. There's a hundred others mentioned here.
As for 'stealing characters' it's noticeable that fanfiction goes with genre writing. Few people write Captain Ahab fanfiction but a lot of people will write Dr. Who fanfiction. A few people will write a Stephen Dedalus, but many, many people will write Harry Potter, or Anakin Skywalker. I think that's because the really strong, unique characters of whom authors can be proud tell their story once and then are done. The Joseph Campbell archetypal characters are far more generic and can be used multiple times. An author who originally writes Luke Skywalker or Lestat is in a way already writing fanfiction, because their character is older than themselves - older than writing in many cases.
I'm oversimplifying, of course. And I can't sum up the arguments for and against that were made in over 1200 posts on Gabaldon's blog, or the 80 posts on Charlie Stross's blog (which is where I found out about it). Stross is very sensible about fanfic, compared with the other writer. Fandomwank takes 1800 posts to dissect this little outpouring. My, so much wank! (I haven't read them all...who could?) John Scalzi has weighed in. And so has George RR Martin. And Nick Mamatas.
If you would like to read some good non-personal debate, Making Light is always a good place to start. They discussed it (in only 900 posts) here.
I would like to end this with a quote from her entry on Wikipedia:
James Alexander Malcolm MacKenzie Fraser (Jamie) : Claire's husband in the eighteenth century. A strapping young Scottish redhead with a complicated past and a disarming sense of humor. Jamie is intelligent, principled, and by eighteenth century standards, educated and worldly. In The Outlandish Companion Gabaldon says he is partly based on the character of Jamie McCrimmon from Doctor Who.