Book Simon is practically a twisted version of the protagonist, silent and bloodied. He's very similar to the Addiction (final boss of AoM DC).
He attacks the player first with a glock, then with a shotgun, then with a machine gun, and finally with a sledgehammer, constantly fleeing when inflicted enough damage.
The little twist is that you fight him as the "real" Simon, in a wheelchair. The player played in fact Book Simon, during the entire game until the end (and plays him in endings 1 to 3).
Book Simon, armed with a flare and a sledgehammer, is gunned down in a dark alley and it triggers the endings where Simon survives.
In Co-op mode, sometimes the game will turn black and white and the music "Fucked 2" will play. To get the game back to normal, you have to track and kill Book Simon, who is armed with a shotgun.
Although the player sees the manifestation of the "real" Simon in-game as the non-bloodied Book Simon, it is hinted that if the player chose the 'dark' paths (such as sparing Carcass and not trusting Purnell), Book Simon turns into the bloodied, battered form he is seen as in Ending Four (or in Co-Op, alternatively). Ironically, this "manipulation" of Simon may also represent the darkness (Book Simon) splitting from the light ("Sick" Simon), as he is only fightable in Ending Four (where the player does two good deeds - trusting Dr. Purnell and defeating Carcass). Additionally, this may represent Simon's darkened past catching up to him in Ending Four, trying to kill him in the real Simon's psychosis (which, if Simon HAD been killed canonically in the hallucination, the "real-world" Simon would have commit suicide).
Although he seemed perfectly real and vain in his attempts to kill the "real" Simon, he was ultimately a hallucination (though from what real Simon saw, he had died). This may show how the crippled, broken down Simon overcame his dark, wretched existance which he once begrudged, and came at peace with himself, ultimately triggering the arguably good ending.