I don't own a Kindle or any e-book device, but I've started to look more seriously into it, especially after reading a couple of e-books on my iPad.
For very casual reading, I have been using the iBooks or Kindle app on my iPad. Which works fine under certain circumstances. Indoors in a well-lit room, it's fine for casual reading. When I say "casual" I mean for shorter than, say, 2-3 hours at a sitting. A doctor's waiting room, for example. Of course the nice thing about the iPad in this case is you can easily use it for many other tasks as well.
If you're really engrossed in a novel and want to spend more time with it, the iPad becomes less ideal. (I'm talking about that zone you get into where you start to carry the book everywhere you go. You read a few pages as soon as you get up, you read it in the bathroom, while you're eating, during breaks at school or work, and in bed before you go to sleep.)
First, it's heavy, and you start to feel the weight of it after a while. Either that or -- if you're like me -- you begin to leave it on the table and read with your neck craned down. The backlit LCD begins to give you eyestrain after a few hours. Finally, the battery life. Although 10 hours of battery can last you a whole weekend of on-again, off-again usage, having the screen on for hours at a time as you read will wear down the battery quickly.
Also, while the backlit screen is an advantage for dimly lit rooms, you hit a point where it's too dark and suddenly reading feels like staring at a flashlight. To be fair, if it's that dark, your e-ink reader won't do you any good either.
I'm very interested in exploring a device like a Kindle.