I've just read my first ever ebook, Virginia Woolf's Mrs Dalloway, using a borrowed Kindle 3 (thanks Sophia!).
As far as usability goes, I'm impressed. The Kindle is vastly better than my iPod Touch, with the e-ink display, the larger screen, and the button-to-page instead of the touch scrolling all significant advantages. It's also much better than reading on a fixed monitor, where I've never managed to read an entire book before. The effect is to make the device "disappear", leaving one to focus on the text.
There are even some advantages over printed books. A Kindle is lighter and more compact than a stack of books (or indeed a single textbook or sizeable novel). It sits flat on the table, which makes it easier to read while eating. And it can be easily operated one-handed (and no, there was nothing salacious in Sophia's collection, not even a copy of Fanny Hill).
One drawback over the iPod Touch is that the Kindle requires external light, so reading in bed with the lights out isn't feasible, or reading in a car in the dark. (Amazon sells a leather case with built-in light, which uses the Kindle battery, but it's rather expensive and must reduce the battery life drastically.)
Another drawback is that the Kindle is black and white and its screen is still only 800x600. This is not a problem with a novel, but I'm not convinced that reading The Elements of Statistical Learning on a Kindle would be so much fun, even if there were an ebook version rather than a PDF. I should probably try reading some non-technical non-fiction, though, to see how footnotes and suchlike work.
The DRM is not an issue if I only read free (speech) books, of which there are more than enough to keep me going. Sophia hadn't run amok downloading the universe, but she had two dozen or more ebooks I could happily have read. (One of these was a conversion to fixed-size page format, leading to the book title appearing in the middle of "pages".) And the simple expedient of not registering with Amazon makes it easy to stick to free books.
If I don't want the whole Amazon ecosystem and just want to read free ebooks, other devices are possible candidates. A look at this comparison table, however, suggests that the Kindle offers by far the best "bang for the buck". (Is Amazon subsidising the hardware to make money selling Kindle books?) The 3G might be worth paying the extra for, if only for emergency web access.
But one big question remains. How much would I actually use a Kindle? I think the answer is "not that much", unless perhaps when travelling. If we go back to Australia I might get one to provide reading material on the flight. And if travel guides work nicely on it - and I'm prepared to use DRMed guidebooks I can't pass on to other people - then it could be a replacement for the heavy and bulky Lonely Planet and Rough Guides I end up carting around. (And here the long battery life of the Kindle would really come into its own, as I wouldn't have to carry a charger on most trips.)