I absolutely loved this story. I loved the fairy tale style, and I thought the author's reading was great. (And for what it's worth: Steve read a couple of his own stories in the past.)
I have to admit that I'm a sucker for stories that explore relationships between humans and AI's or Humanoid robots. One of the biggest reasons I watched Terminator: The Sarah Connor Chronicles was the relationship between John, the Human and Cameron, the Robot.
This story is interesting, not so much because a man falls in love with a (mostly) machine, but mostly I think because the man himself is such a study in opposites: he's a good man, as can be seen by the way he treats the "story telling machine", but he's also a bit selfish: he lures the duke into a card game with the express purpose of taking the robot.
But again, this goes back to the fairy tale nature of the story: fairy tales and fables are full of characters who fall in love and who will do anything to have the object of their affection. And there's no doubt he loves Nerissa thoroughly and utterly. She's not a machine to him. She's a person, and she deserves her freedom, not to be bound as a slave.
That, of course, is what makes his sacrifice so poetic. He not only gives up his Human life in order to save her, but he actually becomes what she was. After that moment, neither of them could ever possibly be apart from the other. After all, who better could understand Nerissa but another ship mind, and who would ever love Denali more than Nerissa could?
That they loved each other, I have no doubt. She loved him for his kindness and his sacrifice and their shared bond of this experience of being a ship mind, and he loved her not just for her glittering jeweled body - remember that he was going to sell it for parts before he actually met her - but for her charm and wit and for the things she brought to his life.