The standard reference on truncated SVD is Hansen's The truncated SVD as a method for regularization [1]. I've been using it on the math association experiment with some success, though nothing as good as Ken's Tikhonov regularization. Now, where can I get a copy of BIT? Ahh, here's the man: Per Christian Hansen.
References
[1] P.C. Hansen, The truncated SVD as a method for regularization, BIT, 27 (1987) 534--553.