I'm still opposed
to some aspects of the Kindle, notably, the DRM and the pricing structure of titles, but I'm going to be in a situation where I don't want to carry 50 pounds of books around, so I finally succumbed.
Amazon reduced the price of the Kindle $60 to $299. A few hours later, it arrived in the mail. Thankfully, Kindles ordered within 30 days of the price drop get price protection, so I got a refund. Of note is Amazons creepy and efficient call you back feature. You simply type in your phone number in the amazon web site and moments later your phone rings and connects you to a customer service representative.
The Kindle is smaller than I expected. About the thickness of a pencil or iPhone. The screen is a little smaller than a standard paper back. The entire unit is slightly larger than three iPhones. It feels like a slate, only electronic. It is small and light enough that I don't mind keeping it in my bag which stays with me at all times which means I'll be reading more, including at work during lunch.

I've never used an e-ink display, but yes, it is readable in any light, very much like ink on a page. When you 'turn' pages, the screen inverts to clear in a brief flash before it renders the new page. This is expected due to how e-ink works, but feels a bit wonky in this day and age. The display obviously has a sustained power active mode that gets invoked when using the menu options, otherwise the screen would flash every time you move the cursor. It occurred to me that it is theoretically possible software problem for the kindle to know when it is plugged in and go into an active, non flashing on page refresh mode under these circumstances.
On power down the Kindle locks the physical UI controls, save the soft power switch and fixes the screen to a randomly-selected image or illustration of a historical author. Call me strange, but I'd like to customize this. e-ink is cool in that it requires no power to display an image, but I don't need to be reminded of this. I find the images grating and unnecessary. I would prefer the option of a blank screen or the ability to upload a jpeg of my choosing.
Do you read trash? I do at times, and I don't care to advertise what I'm reading to others, so I like this aspect of the Kindle. Now, my inner 12 year old girl can read Twilight in public without the disapproving stares.
The Kindle comes pre-registered from Amazon so you don't have to set up anything. Titles can be purchased from the Amazon web site, or from the Kindle itself. Titles can be loaded onto the Kindle via USB, or beamed wirelessly from Amazon directly to the Kindle via 'whispernet' - basically a cell phone network. Obviously it costs amazon money to deliver data this way, but this charge is 'built-in' to the price of the book and you don't get a discount for avoiding whispernet. In general, if you read a lot, and buy books online, you'll save money on titles and shipping - but you'd have to be a fairly heavy reader for the savings to subsidize the cost of the Kindle itself, particularly if you're someone who has to have the latest, best model.
As the Kindle is rendering text out of data on the fly, you can tailor the rendering of the text, most notably the size, bigger or smaller. It would be nice to have a choice of typefaces.
The Kindle lacks some of the user experience finish of an Apple product, so I think the non-technically inclined might struggle a bit with some of the product management. I think the Kindle 2 remains a product outside of mass acceptance, like the first generation iPod. However, if you're comfortable purchasing a book from Amazon, you're probably comfortable managing a library of electronic media at the Amazon web site.
There are a number of extras, including a mostly-useless web browser, mp3 player (also mostly-useless due to the limited memory of the kindle) and text-to-speech so the kindle can 'read' to you. This mIght be interesting if you want to continue reading while you're preparing dinner. There are built-in speakers, or you can use headphones.
Most titles range from $6.68 to $9.99. There are a number of public domain works available for $0, which are stocked with classics like Pride & Prejudice, works of Shakespeare, etc... These can be found anywhere on the net, but who wants to read a book on an iPhone or computer?