There will not be a required book for this class, most topics will be covered by research papers. This is mainly due to the fact that the field changes rapidly and many books are dated by the time they hit the shelves.

Having said that, for a lot of the topics in this class a copy of Durbin, Eddy, Krogh & Mitchison's book Biological Sequence Analysis is good reading. It is especially good at covering HMM's and other probabilistic approaches. It is "suggested" but not "required".

Two optional "reference" books are Waterman's Introduction to Computational Biology and Gusfield's Algorithms on Strings Trees and Sequences. If you really want a bible you may want to get the newly published Handbook of Computational Molecular Biology.

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