'The US government wants the world's scientists to develop technology to block sunlight as a last-ditch way to halt global warming, the Guardian has learned. It says research into techniques such as giant mirrors in space or reflective dust pumped into the atmosphere would be "important insurance" against rising emissions, and has lobbied for such a strategy to be recommended by a major UN report on climate change, the first part of which will be published on Friday...' US answer to global warming

Any chance this could work (without causing some equally damaging side effects)?

Actually it is already happening, and it's called 'global dimming'. Particulate matter in the atmosphere reflects back a lot of sunlight, and if not for that, we would be much hotter.

Unfortunately it also causes some nasty effects, such as insufficent sunlight for plankton and some plants.

Let's face it, we have seduced ourselves.

If you look at the trends in global temperatures over the past century, it's pretty much an upward march. The exception is the middle of the century, when temperatures were pretty much flat for a while. The reason? Sulfur-containing aerosols. So yes, it's probably possible to cancel out the overall warming effect with aerosols, but there's a reason we got rid of the sulfur emissions (acid rain). Even assuming we could find some aerosol without that sort of side effect, we'd still run into a couple problems:
1) As Babs described, lowering the light coming in could have other consequences.
2) We could probably, through trial and error, balance the effects on a global scale, but I don't know how we'd do it on a local scale. That is, just because we could probably fill the atmosphere with enough particles to reduce global temperatures doesn't mean that that would necessarily keep the distribution of temperatures in area the same.

I intended to post a site reference yesterday but didn't. Sorry. So here it is.
Global dimming.