Yes, he’s British, but the books appears to be eligible, under the "resident" clause: "Resident" specifies that author has established and maintained residence in the United States as distinct from being a casual or occasional visitor." I say "appears to be" because any potential eligibility conflicts are always investigated by the Newbery chair and settled, if necessary, by ALSC leadership. This seems pretty straightahead. Gaiman "now lives in the United States," according to flap copy. The US edition also appears to be in close-enough-to-be-called-simulataneous release with the UK edition, avoiding the issue that "books originally published in other countries are not eligible."
[SLIGHT SPOILER ALERT]
Other’s have been touting this, and Fuse8 includes a nice roundup of other reviews at the bottom of hers. My copy was read tag-team-style in my house, requiring subterfuge on my part to get it away for the day that I finished it on lunch break. Resemblances to The Jungle Book aside (since comparison to non-eligible titles does not enter the Newbery discussion) this has an episodic rhythm that provides satisfying short narrative arcs suffused with humor, under a overall coming-of-age arc that grows steadily in tension and apprehension, drawing the reader in more fully. Developments are subtly delivered…it’s not until p.100 that a tactile description of "a noise in the spire, like a fluttering of heavy velvet," and image of Silas leaving "his resting place in the belfry and clamber[ing] headfirst down the spire" give us a little more inkling about exactly what type of being he might be. Since he is first and foremost "Silas" to Bod, so he is to the reader, and we’re forced to put aside any preconceived notions of the "undead" until we know him well enough. Noticeably, Gaiman never does label him in the way I just did. It’s a very nice touch.
I do have to say that I find McKean’s illustrations wildly unappealing. Something about the grayscale, perhaps, just doesn’t do them justice. Illustrations are not a part of Newberydiscussions, as "other aspects" beyond the text "are to be considered only if they distract from the text." These distracted me, though not irreparably. They just fall into the "too bad" category.