I think we all imagine elves with pointy ears – but do they really have pointy ears? (canonical references please)
Douglas Anderson wrote (in The Annotated Hobbit, Flies and Spiders (note 6) 1988)
"In his notes on the stem LAS from *lasse = 'leaf' and LAS 'listen' (*lasse = 'ear'), Tolkien noted the possible relationship between the two in that Elven "ears were more pointed and leaf-shaped" than human ones."
Please note, I remembered this from my copy of the Annotated Hobbit, but I happened to find and copy the text from the same link @herzbube used. I just didn't realize it was the same source. I myself think this particular about linguistics trumps every other objection, in particular the one about Quendi and Men being the same species would imply they had similar ears. If Quendi can live forever and still mate with Men, they can very well have pointed ears.
This essay, which to me seems pretty well researched, comes to the conclusion:
In the final analysis there is no definitive evidence either way on this issue. A strong case can be made for either viewpoint by leaving out the opposing arguments, but when viewed as a whole the matter is ambiguous. The lack of any reference to elven ears in 'canonical' writings ultimately makes a decisive answer impossible.
A very strong argument in favor of pointedness, in my opinion, is that JRRT did not object to illustrations by Pauline Baynes that portray elves with pointy ears.
Yes Tolkien wrote that they do in fact have pointy ears in a letter to the Houghton Mifflin Company:
[A hobbit has] A round, jovial face; ears only slightly pointed and 'elvish'; hair short and curling (brown).
(emphasis mine) I think that answers the question. (If it doesn't I'll change the question :P)
According to the Tolkien Society, the answer is a resounding "Yes".
Do Tolkien's Elves and Hobbits have pointed ears?
Yes, they do. Tolkien doesn’t often dwell on describing the minute physical details of his characters, so it is possible to read The Lord of the Rings and his other writings without noticing that either Elves or Hobbits have pointed ears. However, in a 1938 letter (No. 27, p. 35) to his American publishers Tolkien says Hobbits have “a round, jovial face; [with] ears only slightly pointed and ‘elvish.’” From this it is clear that Elvish ears were more obviously pointed. This was confirmed when The Lost Road was published in 1987. In the Etymologies under the first definition of ‘LAS’, which is the element in lasse meaning ‘leaf’, there is this note: “The Quendian ears were more pointed and leaf-shaped than [?human]” (p.368).
[page references: The Letters of J.R.R. Tolkien, 1981 & 2006; The Lost Road, 2002 UK paperback]
The actual quote from letter #27, to Houghton Mifflin, describing Hobbits:
I picture a fairly human figure, not a kind of 'fairy' rabbit as some of my British reviewers seem to fancy: fattish in the stomach, shortish in the leg. A round, jovial face; ears only slightly pointed and 'elvish'; hair short and curling (brown).
- The Letters of J.R.R. Tolkien, #27
Looking at "new" evidence, perhaps JRRT might have (later) desired the answer to be ambiguous. Etymologies is primarily a linguistic text written in the mid to later 1930s, with some overlap with the early draft writing for The Lord of the Rings. Note the date of the letter about Hobbits too: 1938.
But we now have a much later description, one arguably comparable to the Etymologies entry itself. For comparison, I'll first quote Etymologies (sorry about the lack of diacritics):
LAS1- *lasse leaf: Q lasse, N lhass; Q lasselanta leaf-fall, autumn, N lhasbelin (*lassekweene), cf. Q Narquelion [KWEL]. Lhasgalen Greenleaf (Gnome name of Laurelin). (Some think this is related to the next and *lasse ear. The Quendian ears were more pointed and leaf-shaped than Human).
LAS2- 'listen'. N lhaw 'ears' (of one person), old dual *lasu -whence singular lhewig. Q lar, lasta- 'listen'; lasta 'listening, hearing' - Lastalaika 'sharp-ears', a name, cf. N Lhathleg. N lhathron 'hearer, listener, eavesdropper' ( *la(n)sro-ndo ); lhathro or lhathrando 'listen in, eavesdrop'.
So "some think" this is related, seemingly due to the following description about more pointed and leaf shaped Quendian ears.
Yet much later, after The Lord of the Rings was published, Tolkien once again deals with words deriving from a base LAS (or in the later scenario, also the base SLAS). From Tolkien's Words, Phrases and Passages, published in Parma Eldalamberon 17:
Q lasse 'leaf' (S las); pl. lassi (S lais). It is only applied to certain kinds of leaves, especially those of trees, and would not e.g. be used of leaf of a hyacinth (linque). It is thus possibly related to LAS 'listen', and S-LAS stem of Elvish words for 'ear'; Q hlas, dual hlaru. Sindarin dual lhaw, singular lhewig.
So while we still have the similarly worded "possibly related", now (years later) there is no following statement that actually describes Quendian ears, and no comparison to human ears.
While neither text was published by the author himself (Elvish words like lassi "leaves" and lasto "listen" and Amon Lhaw were published in The Lord of the Rings in any case), this latter entry is a post-Lord of the Rings description...
... where these Elvish "leaf words" are "possibly" related to the Elvish "listen and ear words".
J.R.R. Tolkien wrote many descriptions of elves and men. In none of his stories did he ever describe elves as having pointed ears. He did describe men looking like elves. He rejected the idea of pointy-eared elves. The quest for pointy-eared elves in Tolkien's stories has led people to ignore what he published in his own lifetime to create an image he didn't want to present to his readers.