I ordered a Kindle from Amazon recently, using a bit of store credit and a bit of my own hard-earned. I've been tempted by the Sony Reader in the past but there have been so many different models and revisions I never knew which to look for. Sometimes you can have too much choice.
First things first: I don't like the gleaming white plastic frame around the Kindle screen. In a well-lit environment it just makes the 'e-paper' screen look dull grey. What they should have done is make the frame a duller grey than the paper, so the paper looked crisp and white. (When this thing's out of warranty I'm going to investigate taking it apart and applying a coat of grey to the case.)
Once your eyes filter out the crisp white border it's easy to forget you're reading an ebook. I've had great success converting text and html files using the free version of the Mobipocket reader (runs on Windows, don't know about others) and the Kindle shows up as a removable drive when you connect it using the supplied USB cable, which makes tranferring ebooks a snip.
The text display is excellent, by the way. I believe it uses 16 shades of grey, which means anti-aliased fonts, and I had no trouble reading at the default font size. If you need larger fonts you just hit the text button and use the four-way control to navigate the menu. Easy!
There's a brief flicker when you change pages, but if you time it right you can blink at the same time. Refresh eyes & screen together - works for me.
The device comes with wireless networking which apparently uses the mobile phone network, and it also includes a basic web browser. Nowhere on Amazon (or repeated web searches) could I find any reference to data charges, but I can't believe it's a free-for-all. I do know the Kindle was already linked to my Amazon account when I unpacked it, so I've disabled all wireless features on the thing until I know for sure. (I downloaded a few pages, and will wait a few weeks to see whether my Amazon account shows any new charges.)
The storage space is around two gigs, which translates to a humongous mountain of reading material. Get onto Project Gutenberg, download a selection of ebooks, put them through yBook2 to reformat them, then export to plain text with the paragraphs all sorted. What a way to catch up on a few thousand classics - starting with Three Men in a Boat.
I found the Kindle comfortable to hold and use, so no problems there. It's a solid device, well-made and sleek but not too heavy.
Unfortunately the Kindle has a very slim USB connector which doesn't match any of my other gadgets, which means when I'm out and about with the laptop I can't use the single cable I carry for my digital camera, TV tuner dongle, backup drive, etc. Not a major issue, just a minor irritant. Plus the Kindle cable is very long, whereas you only need a short one if you just want to apply a quick charge from the laptop. (The US version comes with a wall wart, but overseas editions have to make do with USB only.)
In summary, I'm very happy with my Kindle. I have over 3000 paperbacks stuffed into my house, and I can see myself replacing many of them over the next few years. Obviously I'll always keep hold of treasured books, because it's not all about the words. For example, I have a complete set of Famous Five novels in hardback, some of them first editions, and my 1955 copy of 'Martin Magnus on Mars' took me almost 20 years to find. But there are many other books in my collection which don't have that sort of history, and I'd be happy to store those as electronic files in case I ever wanted to read them again.