A new well-written article definitely worth reading:
Papañca & the path to end conflict
by Ajaan Thanissaro
... So the question is, what is it about the thought “I am” or “I am the thinker” that leads to ways of thinking that cause inner and outer conflict? The answer lies in the Buddha’s explanation of what it means to be a being. The act of taking on the identity of a being is primarily a mental act. In other words, it’s because you have passion, desire, delight, or craving for something that you iden tify with it (SN 23:2). In identifying with it, you become tied there. That’s what makes you a being. Your choice of what to desire defines the type of being you are. This process happens both on the macro level–in the events leading from death to rebirth–and also on the micro level, as one sense of identity is shed for another on a moment-to-moment basis in the mind.
http://www.bcbsdharma.org/wp-content/up ... issaro.pdf