This Regulation (1107/2006) has now been approved and was published in the Official Journal on 26 July 2006.
http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2006:204:SOM:EN:HTML

Articles 3 and 4 apply from 26 July 2007 Article 3 reads: 

An air carrier or its agent or a tour operator shall not refuse, on the grounds of disability or of reduced mobility:(a) to accept a reservation for a flight departing from or arriving at an airport to which this Regulation applies;(b) to embark a disabled person or a person with reduced mobility at such an airport, provided that the person concerned has a valid ticket and reservation.

Article 4 carries exceptions to this rule and other special conditions

Other aspects of the Regulation come into effect on 26 July 2008.

                   

Implementation in the UK wil be overseen by the Department for Transport. The DfT has published fact sheets for passengers http://www.dft.gov.uk/consultations/closed/consulcivilaviationreg07/newrightfactsheetec and the results of a consultation http://www.dft.gov.uk/consultations/closed/consulcivilaviationreg07/govtresponse

The Statutory Instrument giving effect to the Regulation was laid before Parliament on 3 July (link) http://www.opsi.gov.uk/si/si2007/20071895.htm