I've had a Kindle 2 for about a year and like it a lot. You need to remember that it is NOT internally illuminated; you need to have a bright environment to read it, or a clip-on book light. It has pretty limited gray-scale abilities, so photos tend to look washed out. I have Ed McGivern's old book "Fast and Fancy Revolver Shooting" on mine, and the images are a little hard to see.
You can stuff a lot of books into a Kindle, but you don't need to keep them there. It is irritating to scroll through several pages of indexed titles to find the one you want, so I usually delete them after I have read them. If you ever want to reread a book that you deleted, you can just re-download it at no additional cost from the archive. The Amazon servers know what you have bought and can resend it if need be.
I wouldn't want to try to read technical literature or a programmer's manual on a device like this, but for ordinary books -- novels, history, non-fiction -- it seems to me ideal.
Not everyone who has bought a Kindle likes it, but most do. I sure like mine.
I'm not sure the big kindle, which is designed to the needs of newspaper and textbook publishers, is such a good idea. But the smaller one fits in a jacket pocket.
Ignore the come-on stuff about email and web browsing. This is NOT an internet tool and no one should try to use it that way unless they are prepared to be disappointed.